Shipping Costs: 6 Tips to Reducing Your Business Transport Costs

portfolio-385530_640Providing high quality service to customers is one of the most important goals for any business. Having a proactive plan to optimize your transportation management will make a huge difference between giving your customers excellent customer services and your customers looking at your competitors to fulfill their needs. Streamlining the delivery of goods is based on saving money on transportation, faster delivery times to customers and an ability of efficiently using up available floor space in the warehouse.

In the current economic environment, businesses that make the most of their transportation options will stay at the top. Below are a few tips to help you get started.

Hire Third Party Logistics Companies

Hiring a third party logistics company to lead and execute an optimized transportation plan, gives you access to several quantifiable benefits. It becomes easier to review the costs associated with getting your products from the warehouse to their final destinations, including insurance costs (take a look at insurance.me), for example. Lower shipping and storage costs are some of the benefits you reap from having a logistics company streamline and study your entire process.

Another measurable benefit is the reduction in the number of products damaged due to improper packaging. With effective packaging systems as well as excellent quality control, your products are shipped in good shape to the final customer; fewer product damages result in a higher profit line.

Automate Transportation

If you are currently managing your scheduling and routing manually, consider putting in place an automated planning system. Route optimization systems quickly offer reliable and accurate routes based on the specific needs of your business and customer. In the short term, this may look like an expensive venture, but the return on investment in a few months will see you realize more freedom to expand due to increased efficiency savings.

Cross-Optimize for Maximum Efficiency

A while ago, it was the responsibility of the warehouse or transportation team to ensure that products are correctly stored and delivered to your customers in a cost-effective and efficient manner. New technology, like a transportation management system, integrates with a warehouse management system and procurement management, making the storage, packing and delivery process an effort that involves all the integrated parties. This translates to better communication between employees as well as an improved system of checking on the status of any job.

Review Company Fuel Usage

If you are constantly handling heavy items and know the weight of your collections or deliveries, consider putting in place a strategy for optimizing fuel costs reduction. The approach means looking into ways of dropping fuel usage by reducing the weight per mileage during transportation. Doing this will also help your business reduce its carbon footprint.

Consider All Shipping Costs Before Billing Your Customers

On average, carriers can bring in more than 75 charges into a bill, including fees for collecting a signature from recipients, delivery over the weekend or fuel surcharges. If your customer is paying for shipping, ensure that you factor in all the extra costs in their bill; this will help you avoid absorbing such costs yourself.

Use Warehouse Space Effectively

For many large businesses, warehouse space is a premium that should be used effectively through an optimized and strategic transportation management system. Keeping product flow in and out smoothly also ensures you save both money and time. The better flow system you have, the less warehouse floor space will be used.

Effective use of space and time means that your products get to customers faster. In addition, the less warehouse space you are using, the lower your overhead costs will be.

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One thought on “Shipping Costs: 6 Tips to Reducing Your Business Transport Costs

  1. Thanks for sharing! We have, I believe 6-7 of our own trucks with drivers. Mostly for customer deliveries, vendor pick-ups, and inter-branch transfers. Most inbound/outbound other than that, we use multiple different carriers. We use UPS and FedEx as well.

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