A good business is all about maximizing all the investments of effort and resource to its fullest potential, and is structured around a good budget structure. A freight cost reduction case study is extremely helpful in understanding an efficient way to reduce transportation logistics costs.
Freight is a crucial part of the company and company logistics. If not understood and addressed properly, freight can cost the company increased charges throughout the entire transport logistics. Regular fuel and machinery and market price rises are not the only rising costs to consider. Suppliers face many budgetary pressures in several other areas and directions too.
Reducing transportation logistics costs is number one priority for any company, when structuring out a profitable company budget. There are several ways to optimize transportation costs, improve the supply chain procedures and save money for businesses. These strategies for decreasing logistical expenses range from streamlining inventory levels, revising smarter shipping networks, providing better processes, improving relationships between suppliers and third parties, and so on and so forth.
A key component in reducing transportation logistics costs is providing a good customer experience. Treating the customer well, listening to their queries, helps improve business and enables a profit flow.
Master 8 Practical Ways of Cost Reduction in Transportation Logistics-
1. Creative and Out Of The Box Ideas
Flexibility and adaptability in transport modes helps to offset losses in ways that may not have been taken into account. Creative ideas and thinking out of the box is always helpful, as opposed to relying only on single modes. Freight shipping by sea is cheaper than air, but the time taken is liable to eventually cost the sales and bring down the profits and damage business.
It is important to look at transport costs for various modes and be ready to making the switch if necessary. Intermodal transport is another option available that is usually not considered when relying on single modes alone.
Rail transport falls much cheaper than road transportation. A combination of rail and road is a way to cut costs and stay on time and in budget. A way to help with mode’s flexibility is to reduce the use of the more expensive shipping options.
Very often when the buyer needs only a part of the shipment as early as possible, the company ends up expediting the entire shipment for the whole load. This naturally shoots up the cost. Instead, a good way of bringing down the costs is by only expediting the freight that is needed, and using cheaper modes for the remaining portion of the shipment.
2. Shipping Consolidation Opportunities
For smaller weights, the “Less-than-truckload” (LTL) shipment is an economical option. Large shipments of different products or shipments for all buyers can be consolidated into one shipment to save cash, by using full load shipping (FTL).
3. Warehousing Services
When shipping goods from point A to point B, especially over a long distance, storing products closer to the customers helps to drastically reduce transport costs.
Security considerations are an important part of freight management. Safety of warehouse operations is imperative. Unprecedented injuries are an expensive overhead cost and must be avoided at all costs. Also lack of warehouse safety can incur government fines that must be avoided.
Several security problems can result in the government closing down the operations. A safety manager, accountable for warehouse safety, is a necessity. Also, organizing ongoing safety training is definitely needed for all warehouse staff.
4. Automatic Container Loading & Unloading System Reduces Labour Costs
Automatic container loading & unloading system is one of the best ways of reducing labour cost, avoid product damages, save costs of production and enhance productivity.
It is important to analyze ways of reduction of labour costs for any warehouse operations, as this helps to bring down overall logistics costs. Each project
should concentrate on the labour cost reduction. Labour management software systems are available which can help manage warehouse work.
Creating incentive programs for employees in the warehouse is also a good solution. Mobility in the warehouse within the four walls, results in overhead cost reduction. This increases overall individual productivity, and also, less staff and less equipment is needed.
The turbulent economy has lately made it difficult for field service and transportation businesses to thrive. The industry is morphing into an intricate space, meaning that it has become critical to gain an in-depth understanding of your transportation costs and how you can mitigate the rising expenses to improve your profit margin and keep your head above water.
There are many reasons why your transportation logistics costs are skyrocketing. For example, a lack of planning and transparency or bad decision making can lead to increased overall costs, failed delivery or appointment targets, unhappy customers, and ultimately a loss of business.
So, what should you do instead to reduce transportation costs? Well, here are five important things you should consider doing.
#1 Provide Your Drivers with Well-Optimized Routes
A bad route can make all your route planning efforts be in vain and your entire route could be a mess if you’re planning routes using a pen and paper. Poor routes also mean that your drivers will spend more time on the road being stuck in traffic and traveling longer distances which will skyrocket the fuel usage and expenses. When you add the overtime costs of your drivers spending more time than estimated on the road, the transportation costs look even worse.
So, instead, ensure you always provide 100% accurate and well-optimized routes to your drivers.
You can do this with an advanced technology solution, such as a route planner, which will automate the route planning process and make logistics management seamless. Such software will plan accurate routes while factoring in traffic, weather conditions, sunrise/sunset times, one-ways, avoidance zones, weight and load capacity, and more, within a minute. In this way, your vehicles will never run empty and your drivers will have balanced workloads and better routes . They’ll ultimately make more stops without you spending more on fuel.
#2 Monitor Your Drivers
Planning optimized routes may be the most important step, but it won’t have any impact on your costs if your field reps or drivers don’t follow it. They may make personal stops, idle vehicles for too long, brake frequently, or even accelerate harshly to make up for delayed deliveries or appointments. All such actions will inevitably lead to increased fuel expenses. Bad driving behavior can even lead to excessive fuel usage or cause road mishaps which means that the damage costs will also add up.
Therefore, you should track your drivers and vehicles and see what the drivers do on the road. To do this, you can use a GPS tracker to monitor your vehicles in real-time and set up speed alerts to get notified as soon as a driver speeds. A tracker can even help you protect your vehicles from theft.
Also, if you go for a route optimization software that comes with GPS tracking, you’ll get the best of both worlds: you’ll be able to plan routes and track the drivers’ progress.
#3 Educate and Reward Your Field Reps
Drivers and field reps are the most important stakeholders in transportation and you cannot reduce costs without their 100% involvement, even with the best process in place. So, let them know why it is important for the business to save on fuel costs as well as how they can contribute in keeping the expenses down. Then, reward them for fuel-efficient driving which will boost their morale and commitment to saving more.
A route optimizer will go a long way in helping you with this. Its reporting and analytics feature will give you the data you need to identify every fuel expenditure which you can then use to provide feedback to your drivers about their performance.
#4 Ensure Regular Vehicle Maintenance
One vehicle breakdown can jeopardize your entire plan and the downtime costs can vary from $448 to $760 per vehicle per day. Can you afford that?
Therefore, you should have a preventive maintenance program in place because regular vehicle inspections and maintenance will prevent breakdowns and keep your vehicles in optimal shape to provide better mileage and save you money. Also, you must change air filters, replace spark plugs, and change the oil and oil filters in regular intervals. Here are six vehicle maintenance tips you should be following.
The reporting and analytics feature of a route planner we discussed above will also be useful here. It provides critical data, such as the total distance traveled, total stops, and the fuel used, which will help you identify when vehicles require maintenance. For example, if a vehicle needs maintenance every 2,000 miles, you can easily predict how soon it may need maintenance again.
#5 Focus on Reducing Failed Deliveries
Every failed delivery will put a dent in your profits. Your drivers may show up on time but it will still be for naught if the customer is unavailable. Such a missed customer will not only jeopardize your other deliveries or appointments but will also cost you more as your drivers need to go to that stop again.
One of the best ways to improve first-time delivery success is allowing your customers to choose their preferred delivery windows. This will ensure that someone will indeed be available at the location when the driver shows up.
You can also allow your customers to track their package delivery statuses or notify them when their packages are nearby. For example, Route4Me offers customer notifications and alerts feature that does just that. It also comes with a customer portal feature that helps customers monitor their own package delivery progress. You can even set access restrictions, depending on how much information you want to reveal regarding the visit, including custom fields, driver identities, and estimated arrival times.
So, what’s your strategy for reducing logistics costs? Do you have any other cost savings methods to add?
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.
Are you searching for a freight cost reduction case study to know an efficient way to reduce transportation logistics costs? If freight is a crucial part of your company, your company will continue to face increasing charges throughout the whole of your transport logistics. In addition to the regular fuel and machinery market price rises, suppliers face many budgetary pressures in several directions.
For companies, reducing transportation logistics costs has always been the number one priority. There are several ways to optimize transportation costs, improve the supply chain procedures and save money for businesses.
Strategies for decreasing logistical expenses can range from streamlining inventory levels, revising smarter shipping networks, providing better processes, improving relationships between suppliers and third parties, etc.
A key ingredient in reducing logistics costs is to treat your customer well, listen to them and profit will follow. To help you reach so much more creative ideas, we present this 8 Practical Ways to Reduce Transportation logistics expenses:
1.Get Creative ideas – Don’t Rely On Single Modes
Becoming much more flexible and adaptable in your transport modes can really help to offset losses in ways you may not have taken into account. Freight shipping by sea is usually much cheaper than air. However, the time it would take could eventually cost you sales.
Try to look at transport costs for various modes but don’t be too worried about making the switch if necessary. Intermodal transport would be another option available for you that could not have previously considered if you typically rely on single modes.
Rail transportation is considerably cheaper than trucking, but perhaps a unique combination of these two could be the key to staying on time and in a budget. Another way to help with the mode’s flexibility is to reduce your use of more expensive shipping options.
If your buyer only needs part of what you ship as early as possible, you will probably expedite the shipment for a whole load. However, you can bring down the costs by only expediting the freight that has to get there quickly and using cheaper modes for the remaining portion of the shipment.
2. Explore Shipping Consolidation Opportunities
The Less-than-truckload (LTL) shipment is an economical option for smaller weights. And if you can try to consolidate large shipments of different products or shipments for all buyers into one shipment, you would save cash using full load shipping (FTL).
3. Consider warehousing services
If you are shipping a lot of goods from point A to point B, especially over a long distance, you can store products closer to your customers and thus drastically reduce transport costs.
You must first and foremost understand the security considerations. Make sure that the operation of your warehouse is safe – Be securely proactive. Do everything to avoid expensive injuries. Try as much as possible to avoid government fines.
If you have several security problems, the government can close down your operation. Get a safety manager who would be accountable for safety and organize ongoing safety training.
4. Use Automatic container loading system to Reduce Labour Costs
One of the best ways to reducing labour cost, avoid product damages, save costs of production and still be more productive is using our Automatic container loading system.
Analyze the reduction of labor for any warehouse operation. Each project should concentrate on the costs of labour. Labor management software systems are available which can help manage warehouse work.
Creating incentive programs for employees in the warehouse also work best. Try mobility in the warehouse in your four walls. Overhead reduced. And this increases overall individual productivity; less staff and less equipment needed.
5. Use Preventive Maintenance
If you want to cut costs on just about any equipment, preventive maintenance is used to reduce logistics costs – Emergency or breakdown maintenance don’t work. It can be expensive in working hours, customer support, fatal accidents (safety): the container is being unloaded, and the forklift dies.
6. Focus On Logistics Cost Reduction
The simple best logistics cost reduction of supply chain tip is this: work together with suppliers to reduce costs. Sometimes suppliers can cover some direct logistics costs. Try to create a consortium of buyers (a buyer and their suppliers) to purchase the necessary logistics supplies (i.e., Transportation fuel) at a lower cost due to buying in larger quantities.
Start inviting suppliers with a structured agenda at your facility. One topic would be to analyze your goods and present logistics cost reduction ideas. The supplier is perhaps the expert in their field of expertise.
Suppliers can surely help by continuing to work with you in a win-win cost savings programme. Keep a part’s function, but drastically reduce component costs, never jeopardize quality.
7. Keep Customers Happy
Keeping logistics support costs incredibly low per order involves customers to be happy (and this Fast-Track customer retention customers). One of the best supply chain cost reduction technique is exceeding customer expectations; companies can keep up and effectively manage the enormous burden of reducing logistics costs.
Because of this high correlation between client satisfaction and overall cost drastic reduction, customer service should also be assessed accordingly for changes in logistics costs.
8. Make Better Uses of Available Storage Space and Increase the Storage Density
Clearly identify and try to eliminate spaces. Always tends to increase the storage density in bins and racks by improving the use of vertical space. Lowers the damage to the shipping containers by eliminating movement during transportation.
Try to make better uses of available storage space to increase the density of storage. Make efforts to encourages organized operations that are linked directly to labor, efficiency, use of assets and accuracy of inventories.
With things gradually returning to normal in the pandemic’s wake, you might be one of many ready for travel this summer. One thing hasn’t changed, though — transportation costs money. How can you defray some of the expenses?
Fortunately, technological advances and old-fashioned know-how let you considerably reduce the price of hitting the road. Here are six simple ways to reduce travel costs in your professional and personal life.
1. It’s Electric
Are you in the market for a new car? If you shied away from electric vehicles in the past out of go-juice concerns, take heart. The number of charging stations in the U.S. has increased exponentially in recent years, and manufacturers continue adding more “pumps.” You can wave goodbye to “range anxiety” as a sticking point against going greener.
If you use your car for commuting to school or work, you may never need to use such a device outside of your garage. Some of today’s models can go up to 300 miles on a single charge, like the Ford Mustang Mach-E with the premium trim. As long as you plug your vehicle in when you return home, you can use it for all your daily errands, angst-free.
What if you want to up your sustainability quotient and reduce transportation costs even further? Biking to the office has long been an ideal way to marry exercise with necessity — but it can leave you sweaty before your big client meeting. Why not investigate electric hybrids that let you switch out of pedal power and cruise comfortably?
2. In the Public Domain
If you live in an urban area like New York or San Francisco, you might not need a vehicle at all. Folks who reside in areas with robust public transportation systems can reduce their travel costs by taking advantage of these resources. As a bonus, you do your part to slash emissions and save the planet.
You could also get a productivity bonus for choosing this transportation method. You can’t work on that budget report while driving, but you can crunch all the numbers you like from your bus or subway seat. Alternatively, you could tune into an uplifting podcast to motivate you for the day to come. The right mindset can transform your career.
Save even more money by getting a monthly pass. Another advantage of doing so is that you don’t hold up the line scrounging for exact change.
3. Go Virtual
While the novel coronavirus pandemic hurt people, it was a boon for the planet. It also introduced many more workers to telecommuting, and it turns out, they like it. More than half of employees who began working from home during the pandemic don’t want to return to the traditional office, at least not every day.
Such an arrangement is ideal for you to reduce your transportation costs, so book a meeting with your boss to discuss making yours more permanent. There’s no reason to abandon the tools you used during lockdown to save on costs. Instead of a client flying in from across the country, use your new Zoom wizardry to facilitate a virtual meetup.
When approaching reticent employers, frame the discussion in terms of benefits for them. It helps if you can back up your assertions with productivity numbers showing you can be as efficient, perhaps even more so, from home. Remind them that telecommuting reduces their overhead costs, thus padding their bottom line.
4. Plot a Course
The best way to get from point A to point B is a straight line. However, flying cars aren’t yet a thing, and vehicles can’t parkour their way over obstacles. You can still reduce your transportation costs by plotting your course before planning any lengthier trips.
Fortunately, technology makes your job a snap. Although you might have previously needed to research road construction, apps such as Waze now alert drivers to such incidents and help you navigate around accidents and traffic jams. The less time you spend idling, the less fuel you burn.
5. Undergo Routine Maintenance
If you drive an older vehicle, keeping up with your scheduled maintenance can significantly reduce your transportation costs. For example, according to the U.S. Department of Energy, repairing a faulty oxygen sensor can improve your mileage by as much as 40%.
If you are one of the rare gems who still drive a manual transmission, shifting gears earlier can improve fuel efficiency. Conversely, aggressive driving burns up more gas — plus, it puts you at risk of a costly accident. Learn to check your tire pressure, which likewise impacts how much time and money you spend at the pump.
6. Serving Size Matters
It’s a basic physics principle — the heavier an object is, the more force it takes to propel it through space. When it comes to transportation, this rule equates to more fuel and higher costs at the pump.
Therefore, one of the simplest ways to reduce your transportation costs is to choose as small of a car as possible for your needs. When shopping for a new ride, pay attention to statistics like vehicle weight. They will influence how much you will pay to fill up at the pump.
Remember, you might not need to carry all the essentials with you for every trip. If you use your vehicle for professional and personal use, driving a pickup truck to transport your hammers and jigsaws may not be necessary. A smaller model SUV with an adequate towing capacity lets you keep the tools of your trade in a trailer you don’t hitch to your ride when running to the store or soccer practice.
If you want to lower your transportation expenses, the six methods above can help. Keeping more money in your pocket while helping the planet is a win-win you can’t beat.
About the Author:
Oscar Collins is the managing editor at Modded, where he writes about cars, fitness and other topics. Follow him on Twitter @TModded for frequent updates!
Businesses will always look for various ways to reduce the operational cost of their transport activities. Every day, Transport Managers are put under pressure to efficiently run their vehicles without any hassle and at the same time, they are also bound to control the expenses to a larger extent. Reducing transportation costs is not an easy job for a Transport Manager, especially for the one who supervises many vehicles under him. The best way of identifying potential cost saving factors in managing a fleet would be to find out the high cost centers.
In transport management, fuel expense accounts up to 30% of overall operating cost, urging many companies to claim this as one of the major concerning factors in their budget. To reduce fuel costs, Transport Managers will often try to eliminate excessive idling, over speeding, observing drivers for harsh braking, faulty route planning, etc. But there are even other ways of optimizing the utilization of vehicles; On considering those factors, it will definitely help in controlling the operating costs of transport activities.
To gather the requisite data for vehicle optimization, businesses are opting Telematics Solutions. With the advancement of fleet management technology, Transport Managers can now easily get real-time data to learn about their vehicle’s status. An effective Fleet Management Application is a one-stop solution to handle multiple transport operations of any corporate. It gives an easy access to learn the whereabouts of their fleet vehicles anytime, anywhere. With better visibility on the operations they can improve accountability, and in-turn, will be able to eliminate the questionable expenditures.
But that’s not all; the data collected from a fleet management application can be used further to optimize the transport operations. This essentially assists the Transport Manager to point out / eliminate all the discrepancies in their functioning. During this process, the companies can significantly cut down on the transportation costs wherever possible.
Given below are five major ways to help companies in reducing the Employee Transportation Costs and scale-up their business:
- Optimize the Trips with an automated Routing and Scheduling engine:
In-terms of Transportation, the fleet vehicles and the drivers in-charge of those are the most important assets for any company. So, the key to maximize their success and increase revenue is to optimize the routes and vehicle utilization. This can be achieved with the help of an automated Routing & Scheduling module fused with the fleet management application. Its flexibility to adjust to the day-to-day realities helps in improving proper seat utilization, optimal usage of vehicles, reducing travel time of employees etc., ultimately benefits the companies with increased productivity and maximum revenue.
- Reduce Manpower by adopting advanced Fleet Management Technology:
Manpower costs are often the largest line item for any corporate. Hence, to successfully control this, one must balance adequate resourcing with cost. The Transport manager must identify and reduce the amount of time staff spends on low-value administrative work and replace it with automated systems. Advanced fleet management technologies are enabling this balance by Automatically scheduling the activities, Promoting paperless transactions, Reducing call volume, Automating the dispatch process and Managing many more advanced tasks at low cost, helping companies to be more productive than ever before.
- Eliminate dry runs with effective utilisation of vehicles:
Fuel wastages can be extremely worrying factor for any Transport Manager, especially when there are too many unwanted dry runs. Some of the reasons responsible for dry runs are Faulty route planning, Scheduling errors, Drivers collecting trip sheets from garages, Poor optimisation of vehicles, No prior intimation of Employees’ no-show act etc. All these can be eliminated with the help of a right fleet management app. The app provides an end-to-end solution with advanced features which helps in effective utilisation of vehicles all the time.
- Monitor vehicle & Driver behaviour using real-time data:
Today, the smartphones/mobile devices are embedded with advanced motion sensors, making it easy for a Transport Manager to monitor the vehicles and can easily get information on driving behaviour of all their drivers. This assists to identify risky driving manoeuvres and to improve driver efficiency, which essentially helps in reducing the vehicle accidents, keeping a check on insurance premiums, identifying staff downtime, ensuring on-time vehicle maintenance etc. A constant look-up on the functioning, helps in taking necessary actions on-time, avoiding the damages and in-turn cost.
- Conduct strategic assessments using insightful reports:
An effective strategy on transport activities is important as it defines a business’ approach towards fleet management. Different strategies must be implemented and reviewed regularly to ensure company’s growth. An advanced fleet management app provides all the insightful analytical data required to analyse the functioning. This gives a complete understanding to right-size the fleet vehicles, develop a safety culture, adapt some fuel management techniques, improve on customer satisfaction, bring-in relevant policies and procedures for drivers to manage a sustainable & cost-effective fleet.
In the era of technological advancements, it is important for any corporate to understand the cost flow of all their operations right from procurement to delivery. To beat heavy competition in market, the respective business should be the cost leader by all means. With a solid integration plan in place, the company will gain loyal customers, streamline their delivery processes, and save a lot of money. When one wants to improve the profit margin in their business by reducing the Transportation Costs, it’s a great idea to consider and implement the above-mentioned ways. These measures will definitely curb the unnecessary expenses and results in effective management of transport activities.
The past year as well as this one got affected by the pandemic situations and all businesses were impacted. Yes, shipping to Saudi Arabia got a bit more difficult as well. But with the right company and proper organization, you can still execute shipments on time. The only question is – how to reduce transportation costs in 2021? The goal is to make it cost-efficient as well. So, let us provide a few pieces of advice. Maybe you can implement some of those in your business.
Improving all aspects of your business is a way to reduce transportation costs in 2021
Some logistics companies in Saudi Arabia are ready to invest more into the whole organization. Changing the business model or introducing cutting-edge technologies and innovations can reduce transportation costs in 2021 significantly. But this does not mean you must invest a ton of money and change the already established operations. A simple tweaking can do the trick and change everything significantly. Work on the following:
- Warehouse storage, accessibility, and inventory.
- Communication between teams, partners, 3 rd party vendors, and other associates.
- Refreshing software versions, equipment, tools, and vehicles.
Check where you can improve and make your daily routines more efficient and without any delays. If all your shipments go out on time, you will reduce costs considerably.
Focusing on the reduction of failed deliveries is a way to reduce transportation costs in 2021
Reducing the overall number of failed shipments is crucial to any business and shipping and logistics companies alike. They work in a wide network of associates and the higher the number of vendors that handle one shipment, the bigger the chance for delays or damages. Therefore, as we already said, you must revise your business plans with all your vendors and associates and improve transportation plans and methods you use to deliver your service to the customer. The outcome will surely reduce transportation costs in 2021.
This solution might look strange at the beginning but motivating your employees can return tenfold. Simply raising the paycheck and investing in the education of some of your less productive workers can motivate the whole group. The result can be astonishing. Your employees will be motivated, encouraged, and engaged. You can have 100% involvement from all your employees and associates with this simple trick. Although, it is up to you if you are raising their paychecks, providing bonuses, or investing in their education. But be sure to reward them and motivate them in a way.
Keep your docks organized
Many people use sea cargo Jeddah solutions as well as air-freight. This means your loading docks are constantly busy and in such a hectic environment, there are higher chances for mishaps. To avoid this, you should keep well-organized routes for your carriers, fork lifters, vans, trucks, etc. Also, all your equipment and vehicles should be optimized and maintained regularly. If you keep up with it, you will lower the chance of damaging cargo and your workers will be safer. All in all, a cost reduction for sure.
Maintain and check your vehicles and equipment regularly.
These were the most common ways to reduce transportation costs in 2021. Hopefully, we gave you an idea or two but we are sure you will think of something else after reading our piece as well. Good luck and stay safe.
Driving is necessary for every entrepreneur or business owner. With that in mind, here’s a list that includes some of the best methods you can use to save money on transportation.
Avoid Traveling with a Full Trunk
If you want to commute fast or you want to reach another part of the city without spending additional gas, clean out your trunk. You don’t want to carry unnecessary stuff with you. The best thing you can do is drive with an empty trunk. Using your trunk as storage will limit your fuel efficiency. If you use this approach, you will get a fuel efficiency boost of around 2%.
Complete Maintenance on Time
You’ll need to keep financing car repairs to ensure that your work vehicle is properly maintained. Tires not inflated to the recommended PSI or that have low tread use more gas. Not having your oil changed regularly also lowers the efficiency of your engine.
Maintaining your speed limit will help you save gas. Avoiding unnecessary acceleration will help you save on fuel too. Use your cruise control when you’re driving long distances to keep your speedometer from going up and down too much.
Open the Windows
Studies have shown that if you roll down the windows, your car will be more fuel efficient. Rolling down your windows will bring in the fresh cool air and saves you money on the gas it takes to run your A/C. You’ll want to limit this to slower driving because when you drive faster the aerodynamics of the car with the windows open will create drag and use more gas.
Some car insurance companies will give you a lower rate if you only require low mileage. It’s crucial to talk with your insurance company because they will offer you guidance and the help you may need. You could get some great discounts based on your circumstances.
Avoid Toll Roads
If you want to spend less on local transportation, you should consider avoiding toll roads. These roads can cost anywhere from $1 to $10 per direction depending on the city. Currently, the most expensive toll road in the US is a 2.5-mile tunnel in Alaska from Anchorage to Prince William Sound costing $13! Other roads charge per mile and have multiple tolls along the way.
Public transportation can be daunting to figure out depending on the city you live in and the time you need to get there. In towns like New York, public transportation is easy, affordable and reliable and most people use it. In a city like Phoenix or Los Angeles, the public transport network is not set up conveniently at all, unless you are going a very short distance. You can look online at your local city’s website to see your options, stops, and routes.
Carpool with Your Friends
Ridesharing can save you tons of money. You save money on gas when your employees or partners drive, and you will save on regular maintenance because you drive less.
Plan your Parking
Paid parking can add up, and it can make it harder for you to save money on transportation when you are going somewhere that doesn’t have free parking.
Opt for Public Transportation
Believe it or not, public transportation is quite handy if you have metro or bus stations in your city. You can get that cards are designed to be inexpensive, and you can quickly get to where you want to go if you use this method. Some cities offer employers discounts on their tax bill to reimburse their employees for purchasing metro cards as well, so check with the city you live in or your employer.
Get a Bicycle
A bike is one of the best investments that you can make to save money on transportation costs. Another positive aspect of riding your bike is that you get to be in the fresh air and exercise. A bicycle will also help contribute to less pollution.
Check for Any Transportation Incentives
Some cities are encouraging their residents to use a method of transportation. You can use those discounts and incentives to your advantage. Find out the type of discounts that you can get, and this can come in handy for saving money and sometimes even making money!
An application like GasBuddy will help you find the nearest and cheapest gas stations around you. It can come in handy to use an app like this especially if you aren’t in a familiar part of town. The best thing is that most of these applications are free, so downloading and using them won’t cost you anything.
Another excellent app is Waze, this app will direct you away from traffic, which will help you avoid that stop and go traffic that eats up your gas.
In the end, it’s safe to say that trying out these methods will be a great solution to save money for your business on your day to day transportation. Make sure that you use as many of these tips as you can. If you use them wisely, you’ll be able to save quite a bit of money. Also, as you can imagine, these discounts and savings can add up exponentially as time passes!