How to Reduce Your Transportation Logistics Costs

If shipping freight is a large part of your business, your company probably faces rising costs across all your transportation logistics. In addition to the usual price increases in fuel and equipment costs, shippers face additional budget pressures from many different directions.

Increased Customer Expectations

The consumer demand for ever-faster delivery times for everything from food to furniture echoes down the supply chain to force shippers to find new ways, and more budget, to keep their customers happy.

The Global Marketplace

The web may have expanded your markets, but you need to find cost-effective ways to ship to them.

More Demand for Transportation Logistics

The boom in eCommerce, produced by both start-ups and the shift by bricks and mortar to online channels, means more competition to find transportation logistics solutions

More Paperwork & Fewer Drivers

Recently imposed regulations, like the electronic logging device (ELD mandate in the U.S., and driver shortages on both sides of the border have pushed up shipping prices.

Minimizing costs is always a central focus for businesses. But the number and speed of recent cost increases for shippers can quickly put them in a competitive crunch. Their expenses have risen, but, with inflation still at relatively low levels, price increases may not be enough to offset them.

So keeping freight costs in check is both more important than ever and more difficult than ever. Whether you ship internationally, or locally, here are just a few ways to lower your transportation logistics costs.

1. Use Different Modes of Transportation

Becoming more flexible in your modes of transportation can help offset costs in ways that you might not have considered. Shipping freight by sea is usually less expensive than by air. But the time it takes might be costing you sales. Keep an eye on transportation costs for different modes and don’t be afraid to make the switch.

Intermodal transportation is another option that shippers might not have considered if they have traditionally relied on single modes. Rail transport is usually less expensive than trucking, but a combination of the two might be the best way to stay in budget and on time.

Yet another way that mode flexibility can help is by minimizing your use of more expensive shipping options. If your customer needs just part of what you ship sooner than later, you will likely expedite shipping for an entire shipment. But you may be able to reduce costs by expediting only the freight that must get there fast and use less expensive modes for the rest of the shipment.

2. Explore Opportunities to Consolidate Shipments

Less-than-Truckload (LTL) shipments are a convenient option for smaller weight. But if you can manage to consolidate shipments of different products or shipments for different customers into one shipment, you can save money by using more full-truckload shipping (FTL).

3. Automate Your Logistics

If you can track your shipments from when they leave your door to when they are received by your customer, you can spot problem areas in your transportation logistics. It will also give you real-time information about unexpected delays, allowing you to react faster and more cost-effectively.

4. Supply Chain Visibility

Overseeing and maintaining visibility and control of your supply chain can reduce unexpected costs. By tracking and managing control over your products, parts, and components in transit, service disruptions or huge shipment delays can be alleviated quickly. Alternate routes of supply or distribution can be implemented faster which contributes to better cost control. While there’s no way to predict disruptions in the logistics process, using real-time dashboards can give managers better insights into mitigating potential issues down the road.

5. Timely Planning & Scheduling

Ensuring operations are well-timed goes a long way to cutting inefficiencies which can prevent unnecessary and inflated logistics costs. Leverage scheduling software so that planning operations such as production schedule, transit times from pick-up and delivery to shipping routes move as planned. This will alleviate delays and missed deadlines, which can reflect poorly on your company’s reputation and may ultimately cause a potential loss of clients and finances.

5. Consider Warehousing Services

If you do a lot of shipping from the same point A to the same point B, especially over a long distance, it may be an option to warehouse goods closer to your customers and reduce your transportation costs.

6. Find a Transportation Logistics Supplier

Yes, Pival offers transportation logistics services. But we’re not just shamelessly promoting ourselves. The core competencies of your business may not lend themselves well to keeping your shipping costs in check. But it is the role of a transportation logistics company to maintain up-to-date options and flexibility in ways that can make the cost of outsourcing your transportation lower than keeping things in-house.

If your business has faced additional shipping costs recently, your profit margins can be shrinking faster than you think. Even if you haven’t considered outsourcing your transportation logistics, call PiVAL today. We’re a leading third-party logistics company that will help you find one or more options for keeping your costs under control.