If shipping is the focus of your business, you’d be facing rising costs in your transportation logistics. Aside from the expenses on fuel and equipment, your business will deal with additional budget pressures in various aspects.
Reducing operational costs should be one of the main priorities for businesses. Sadly, the increasing expenses can be challenging to manage. With this in mind, keeping the transportation logistics costs manageable is important yet also tricky at the same time.
Whether you ship locally or internationally, here are several tips to minimize your transportation logistics costs:
1. Provide Regular Vehicle Maintenance
A breakdown involving one or two vehicles in your fleet can add up to your logistic expenses. Preventive maintenance is one of the surefire ways to avoid breakdowns and ensure your vehicles are in good shape while on the road.
A professional will monitor the total distance traveled, number of stops, and amount of fuel consumption, as well as perform meticulous inspections to ensure all components are working optimally and pinpoint areas requiring timely repairs.
A severe breakdown could add up on the costs, which could be prevented if you had regular, professional maintenance.
2. Automate The Logistics
If you can monitor the movement of your shipments once they depart and when your customer receives them, you can conveniently pinpoint problem points in your transportation logistics. When you automate the logistics, you’ll gain real-time information on any unexpected delays, allowing you to make efficient and cost-effective actions.
3. Have Timely Planning And Scheduling
Making an effort to maintain timely operations can significantly help in minimizing inefficiencies to prevent unnecessary and high logistics costs. A scheduling application or software will come in handy to ensure a smooth production schedule, transit times, and shipping routes.
With this approach, you can minimize delays and missed deadlines, which can negatively affect your company’s reputation and might result in loss of clients and sales.
4. Reduce The Fleet Size
One way to minimize your expenses is to reduce the fleet size. Once you efficiently distribute shipment to available vehicles, they’re more likely to cover more ground in less time. With this approach, your fleet will have fewer trips but is guaranteed to deliver more.
5. Choose Better Routes
Various factors such as traffic, road restrictions, accidents, and construction can disrupt timely logistics. A lousy route for your fleet can lead to skyrocketing fuel consumption and expenses, along with overtime costs for drivers who spend more time on the road.
If you want to save on transportation logistics costs, look for the shortest route. The ideal one will take the least amount of time to get from one location to another. When deciding on the best route, you need to consider the recorded and real-time traffic, road restrictions, and other hazards. Doing so will allow drivers to spend less idle time while ensuring timely transactions.
Another option to consider is using a planner to ensure accurate and optimized routes. Depending on the tool you use, it helps automate the route-planning process while considering various elements such as traffic, one-ways, weather conditions, weight and load capacity, sunrise or sunset times, and many more.
6. Monitor The Status Of Your Drivers
Aside from choosing the best routes, you also need to ensure your drivers are working efficiently. Some drivers might idle vehicles for long periods, go on personal stops, break frequently, or accelerate harshly to make up for delayed deliveries. Remember that these actions can result in higher expenses, large consumption of fuel, or risk for road accidents.
Make sure to monitor your drivers and vehicles in real-time with a GPS to know their status and provide speed alerts. Additionally, installing trackers on your fleet can protect against theft.
7. Eliminate Failed Deliveries
Failed deliveries can also add up to your transportation logistics costs. There are instances in which drivers are on time, but the customers aren’t around. In such cases, it can disrupt other deliveries and add up the expenses since the drivers need to return to locations with failed delivery attempts.
If you want to improve the first-time delivery success of your drivers, try to provide customers with options to select their preferred delivery window. You can also provide measures that allow customers to track the delivery status and provide notifications if a package is on the way or nearby.
Final Thoughts
When your business is currently facing increasing shipping costs due to the effects of the global pandemic, finding ways to lessen the expenses is advantageous. If you want to ensure smooth business operations, these tips will come in handy in minimizing the transportation logistics costs in the long run.
Also read: The Growth In Logistics Business In The E-commerce Era: An Analysis
