A Prescription to Reduce Freight Costs05 May 2015, by Blog, Logistics Outsourcing, Transportation Spend in
Sometimes I think I’m Going Crazy
Shipping freight is critical to your business and you should not be surprised that freight and logistics costs could be one of the largest expenses for your business, as they are for most companies. When you consider your freight costs, it is not only the hard cost of shipping the freight, or the freight rate, but other costs as well, like labor and technology. Controlling costs can be a difficult and ever evolving process that takes a great deal of resources and collaboration. All too often, transportation spend is an area when left alone can take time to bring back in line. When you do not consider the management of your transportation spend to be a priority, you may be affecting not only your bottom line, but customer service as well.
Most business owners think that handling the complex and ever changing world of logistics in house will save money. For you to turn your supply chain logistics from an expense to a competitive advantage, you have to leverage the strategies large companies use. When your transportation and shipping logistics processes are left unmanaged or lack the necessary resources to fully support a strategy to take control over the processes, it is likely that your transportation and shipping logistics program is costing you. Today, the growing trend to outsourcing logistics and supply chain has businesses saving time and money on their freight operations. The traditional bid process approach businesses use to employ as a means of lowering freight costs has shown only marginal cost savings. Costs are only reduced slightly and the real costs are not distributed and you never realize maximum cost savings with such a strategy.
Many companies’ today reduce their freight costs with the support of a third-party team of logistics professionals who work with you to develop your freight analysis and plan. When you have a complete analysis of your current freight logistics you are guaranteed of getting the most from your carriers and shipping departments. A good third-party logistics team of professionals will work with you to align your transportation goals with your overall management plan. The freight analysis will provide you with a picture of where you are and the strategies needed to move you forward. Now you just need to decide if it makes sense for you to implement the ideas suggested to you.
Road to Recovery
You can now determine how much you may be able to save when you do a review of your freight logistics strategy. The freight review process you do will outline recommendations and strategies to reduce your freight costs. You should also have new procedures to put in place, and technology that can keep everything running smoothly. As your sanity returns, you will have cut your logistics and shipping costs and put more focus on your core business competencies allowing you to increase revenue and serve your customers better.
If you want more information on how outsourcing may help your business, grab your free copy of “Return on Logistics – Turning Your Supply Chain Logistics into a Competitive Advantage and Bottom Line Profits” at www.returnonlogistics.com