How to Reduce Transportation Cost in Supply Chain

How to Reduce Transportation Cost in Supply Chain

Decreasing transportation logistics expenses is one of the top priorities of many businesses. If shipping freight is a vital component in the operations of your company, then it will probably continue to encounter increasing costs in the entire transport logistics. Aside from the usual increase in fuel prices and equipment expenditures, your business also faces other budget concerns.

With the rising financial difficulties these days to keep a business afloat, your company must look for better ways to reduce transportation cost in the supply chain. This is a concern that companies must try to address to save money. Whether you ship your goods domestically or overseas, here are 6 suggestions on how to reduce logistics cost in your business.  

6 Strategies to Decrease Transportation Logistics Expenses

1. Utilize Various Modes of Transportation.

Be more flexible in selecting your modes of transportation that will help your business minimize logistics costs. Compare transport costs of different modes and do not be afraid to make necessary changes especially if options offer solutions on how to reduce logistics cost. 

Sea shipping is less expensive than air but the length of time it takes to deliver your goods might cost you sales. Intermodal transportation is another alternative to reduce logistics cost. Rail transport is cheaper than trucking but combining them can keep you on time and within budget.

Minimize using more costly shipping options. If your customer only needs part of what you entirely ship earlier than others, you can expedite the delivery by shipping the whole load. But you can minimize the costs by expediting the freight that must get there quickly and using less expensive modes for the rest.

2. Choose to Automate Your Logistics.

If you are still seeking help on  how to reduce logistics cost, one way is through automation. Automate your logistics and take advantage of the benefits that can help reduce transportation cost in supply chain 

  • Easily track the shipments from the moment cargos leave your doorstep until they reach your customer. 
  • Identify the problem areas in your transportation logistics if you choose to automate. Receive real-time information regarding unexpected delays so you can deal with the issue faster.

3. Supervise Your Supply Chain Visibility.

You can decrease unexpected expenses if you can manage the visibility of your supply chain. Shipment delays or service interruptions can be alleviated if you can efficiently track down and control your products and components in transit. Substitute routes of distribution can be implemented quickly. This is one of the solutions on  how to reduce logistics cost in the supply chain. Managers can utilize real-time dashboards to have better insights into minimizing possible issues during shipment.

4. Use Available Storage Space.

Identify and efficiently utilize the available storage spaces in your facility. You can improve the use of vertical space by increasing the storage density in your racks and bins. Eliminating movements while in transit is one of the ways to reduce logistics cost. This lessens the potential damage to the shipping containers during transportation thus saving money from additional expenditures.  

5. Consider Selecting Warehousing Services. 

You can consider storing your goods in a warehouse that is closer to your customers if you are shipping many items from one place to another destination, especially over long distances. Selecting a warehouse service is a good option if your company is looking for solutions on how to reduce logistics cost. Just make sure that your warehouse operation is safe.

6. Ensure On-Time Planning and Scheduling of Operations.

Ensure that your business operations are well-timed to remove inefficiencies that can raise logistics costs. Utilize scheduling software that can assist in your planning operations like production schedule and transportation from pick-up and delivery to shipping itineraries. This alleviates missed deadlines and delays which can help your business how to reduce logistics cost. Inefficiencies can affect your company’s reputation and may cause possible loss of customers and finances.

ALSO READ: Last Mile Delivery Logistics Trends That You Should Know

Many strategies can help a business minimize its transportation cost in the supply chain. With many budgetary concerns such as a continuous surge in fuel prices and equipment expenditures, your company must look for practical ways on how to reduce logistics cost. Keeping in mind the suggestions and applying them to your business operations can help you lessen your expenses and save money.

Worklink Services, Inc. (WSI) is a logistics company in the Philippines that provides efficient logistics services to different domestic industries. Our people are knowledgeable and experienced in all aspects of sea cargo shipping. WSI’s air freight services ensure that your shipment will reach its destination safely and fast. Our ground transportation fleet efficiently handles a diverse range of cargo requirements at very competitive prices. Our trucking services can pick up your shipment by our first available driver and deliver it to your desired destination. Do you want to learn more about WSI’s various logistics services? 


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