Nobody likes to spend more money than they must. This is why reducing logistic costs is often a huge priority for businesses. However, it can be confusing to navigate the different expenses incurred when moving product from sourcing to final delivery.
So how do you save money without cutting corners? The answer lies in a variety of different tactics. Read on to learn our top five ways to reduce logistics costs!
1) Make Informed Decisions
You wouldn’t make a major car purchase without looking the basic product information up, right? The same principle applies to logistics. Make sure you get the details on shipment options, such as the cost of freight for each service level and cost of carrying inventory. The more information you have, the better.
Provide to the decision-makers/customers of your logistics network the cost of freight for each service level, the reliability of each lane for each service level, and the true cost of carrying inventory so they can make informed decisions. People generally will select the less expensive option that still meets their needs.
2) Keep Customers Happy
It’s a good business practice to keep your customers happy. In fact, it can even help reduce logistics costs.
Happier customers mean less returns and reverse logistics, which saves you money. Additionally, less money has to be spent on support resources, and that budget can be relocated to a more productive avenue. Regular customer service surveys or other forms of feedback can help you assess what areas you need to improve on in this department.
3) Select the Right Carrier
It is vitally important that you use the right carrier when shipping. Different carriers have different costs, and offer different specializations. It wouldn’t make sense to choose someone who specializes in ocean freight if you are looking for primarily air freight. Investing in a TMS system can help match you with the best carrier for each shipment based on different factors, including cost.
4) Reduce Paperwork
Logistics is a game of forms, with every step of the shipping process having its own paperwork requirements. All this paperwork takes a lot of time and organization, with just one mistake leading to problems that can cause delays or worse. Furthermore, the time that logistics managers spend on this paperwork could be better spent elsewhere.
By digitizing your paperwork, you can save money in the long run. Logistics managers can focus their efforts on reducing costs in other areas, and there is less of a chance of errors being made in an automated system. It’s a win-win!
5) Track Your Shipments
Last but not least, we suggest that you track your shipments. As discussed in our previous blog, shipment tracking has many benefits. Saving money is one of them.
As much as we may wish to avoid it, there are weak links in the logistics process. Tracking allows you to get a complete picture of your logistics process, and identify these weak links. You can then eliminate them, saving money, avoiding carrier fees, and ensuring compliance – easing your concerns, along with those of your company or other parties.
While these are not the only ways to reduce logistics costs, we feel they are the most effective. At OASYS, we pride ourselves on helping our customers save money while still providing top notch customer service.
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