Regarding logistics, many factors can influence your costs and impact your bottom line. The way you ship products, the carriers you use, and how you track your inventory are just a few essential things to keep in mind. With all these complexities, opportunities for cutting costs and improving efficiencies should always be a priority. Here are six crucial ways you can save on logistics and enhance the efficiency of your supply chain:
Analyzing Consumption
One of the most important things you can do is analyze your consumption and make changes where needed. It’s easy to keep doing what you’ve always done, but if there are areas where you could save money, it may be worth reevaluating your processes to get the most bang for your buck. If you’re having trouble evaluating your costs or don’t know how to save on your shipping services, consider utilizing a freight broker like Freight Flock to help you manage and optimize your logistics.
Taking the time to look at exactly where your logistics costs are coming from will give you an idea of which aspects of logistics are working well and which areas could use improvement. These might include:
- How much fuel it takes each day for all vehicles (and what kind)
- What types of equipment are used regularly
- What materials go through inventory during each season or year
- Quantity and frequency of shipments. Is there room for consolidation?
- Location of origin for each product shipment. Can you save on procurement costs?
Freight Aggregation
Aggregation is a method of grouping together shipments to reduce costs. Today, freight aggregator algorithms can quickly and efficiently aggregate your shipping inventory. The benefits of aggregation include reduced costs and transit time for your freight, plus fewer paperwork headaches for you and your employees.
With a freight broker like Freight Flock, you can benefit from their freight aggregation tools and take advantage of shared truckload shipment opportunities (STL). Freight Flock’s proprietary algorithm “match your shipments with freight that’s moving in the same direction, creating one load-to-ride shared truckload.” Freight Flock is the only freight broker that guarantees STL shipping at the point of sale. Not only does this strategy save you time on shipping, but it can significantly cut down on logistics costs for your company.
Work With an Experienced Freight Broker
The first step to saving money on logistics is to understand your freight costs. You need to know the following:
- Where are you shipping from, and where are you shipping to?
- How many pallets of goods do you need to ship?
- What’s on each pallet, and how much does each pallet weigh?
Knowing this information will help you decide whether it makes sense for you to use a freight broker. Brokers can save money by providing competitive rates and finding other ways for businesses to ship their products. Experienced brokers like Freight Flock also offer valuable expertise about the market to help you get the lowest costs and avoid low capacity periods.
Your freight broker is your intermediary between carriers and suppliers for all your logistics needs. A reliable freight broker should have the industry experience and resources to efficiently and expertly manage your supply chain. The benefits of a freight broker service include reducing costs, improving customer service, decreasing delivery times, and more.
Automate Where You Can
Automation is a great tool to save money on logistics. It can be used to solve problems and make your company more efficient, but it’s important not to get too carried away with automation.
Automation is great for repetitive tasks performed regularly that don’t require much thought or human interaction—like printing shipping labels or labeling packages by hand. It’s also useful for sending notifications via email when there’s a problem with an order (for example, if you’ve accidentally shipped the wrong items). Integrating automated systems into your workflow allows you to manage your inventory, staff, and orders more efficiently. Digital workflow tools can improve communication and product quality if applied appropriately.
Enhanced Technology Solutions
Keeping track of your freight costs can be a real challenge if you’re in the logistics business. There are so many moving parts and uncertainties that it’s difficult to know whether you’re saving money. Streamlining workflows and integrating digital tools for better organization, communication, and customer service is essential to remain competitive in today’s marketplace. Here are a few digital tools that can help you bring efficiency and ease to your supply management operations and logistics:
- A freight management software. These programs can handle your shipping operations and save you money. They can also help you identify cost-saving opportunities, such as by helping to consolidate shipments or find reliable partners.
- A freight rate estimator. This tool can help determine how much each shipment will cost based on size, weight, and other factors that may influence pricing (such as shipping seasonality).
- A freight rate prediction tool. This helps predict freight rates in the coming months based on historical data from past transactions.
- An inventory tracking tool. These allow users to track their inventory levels from anywhere at any time without having someone physically present at every location, meaning fewer labor costs and greater transparency.
Optimize Procurement
In some cases, you can save money by optimizing your procurement process. If you’re paying too much for shipping or warehousing services, it may be time to look at your supplier base and see if there are better deals. Ask yourself: What fees are being levied on me? How many suppliers do I need to manage my supply chain? How many warehouses do I want in each location? Consider your other service options if you can cut costs by working with a different supplier or an alternative warehouse management group.
There are no shortcuts to success. You need to invest time and effort into analyzing your supply chain consumption and making changes where they’re needed. Consider the benefits of a freight broker, and scrutinize every step of your logistics to find opportunities to cut costs and save time.
