The white-collared professionals involved in the logistics & supply chain industry are often faced with the question ‘How to reduce freight costs?’ Businesses that involve inventory management know the fact that freight costs can’t be certain as it depends on the variety of economic factors like fuel cost, labour wage, government tax & regulation policies & so on.
Irrespective of above given parameters, here are top 7 ways to reduce logistics costs and increase your logistics efficiency;
For the shippers involved in the shipping of non-consumer goods, shipping on off-peak days is a great option to save on freight cost. Friday’s and Monday’s are often considered as an off peak day as the majority of customers try to ship their products on Thursday, so that it is ready for sale on weekends.
Though the smallest cost segment, packaging of a product is the most simple and efficient freight cost reduction techniques in logistics. Reconsider the way you pack and reducing dead spaces will help in saving a lot of freight cost. The packaging has a great impact on overall freight costs and it makes sense to design cartons that help in reducing dead spaces and increase freight cost efficiency.
Shipping in bulk incurs less inventory carrying costs as compared to shipping in multiple or smaller consignments. Shipping 6 pallets at once will save a huge amount of freight cost than shipping 2 pallets every 2 days.
Shippers who take up bulk shipments get less rates and it is also a time-saving strategy as carriers do not need to process, load or unload as compared to smaller shipments.
Do you know one of the most effortless ways for carriers to do business is to fill miles and interestingly it is also a great way for shippers to reducing freight costs. Contracting with carriers near to shippers frequent ship-on locations will make your load backhaul for them and you’ll get cheap rates as compared to standard freight rates.
Consolidated shipments refers to a combination of various smaller shipments from multiple suppliers that share a similar destination. The consolidated shipments is the most cost-effective way of freight transportation as it utilises the complete space of a vehicle and leaves no dead spaces.
Impactful results need right planning & coordination to make things work. Proper route planning & optimization, timely procurement of products and delivery will help reduce freight cost to a larger extent.
Taking freight operations online is undoubtedly the best way to track your freight cost and also reduce it by taking decisions based on data. Modern inventory management software will give shippers an access to data that will help them to identify poor shipping performance and to identify the potential freight shipping cost..
Most of the logistics businesses are shifting to automation and digitisation to keep track of your budget and freight cost allocation. With ease of integration, Fretron is one stop solution for all your logistics & supply chain needs. From order planning to final invoice & settlement, Fretron gives you access to real-time data points to help you revamp your business strategies.