5 cost-saving tips for freight transportation
The theory goes that the two most effective ways to achieve measurable savings in transportation costs are operational efficiency or negotiation with transportation service providers. How do you translate both into specific actions? Here are some key tips on how to do it.
1. Supply chain design and alignment
The profitability of the supply chain depends on its design. In other words, the choice of the players involved in the supply chain, from manufacturers to suppliers, including producers, distributors and transporters. To align them is to reduce costs and improve service.
On the other hand, transportation networks are a good ally to reduce delivery times, which in turn translates into improved cash flow. It is also key to establish a good balance between the price of products and services and the distributor’s capacity for expansion as the company increases in size.
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Within the process strategies themselves, to reduce costs it is important to take advantage of the cross-docking technique, and for this purpose there is nothing like using transport networks. This way, the loads are moved directly and with the shortest possible time and handling from unloading time to the moment they are transferred to the freight transport vehicle.
Delivery times can also be lowered with postponement techniques. When the customer’s demand is specified, a high speed response to said demand is obtained.
3. Decrease stock costs
The ideal approach to reducing transportation costs should be to look at the overall costs of operational logistics. By reducing the size of stocks, smaller batches can be shipped in exchange for an increase in their number.
Compared to large shipments, the cost per kilo ratio of transporting smaller shipments is worse. However, it will be key to incorporate the costs of storage of goods, measure and evaluate their evolution in order to draw any conclusions.
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4. Load consolidation
If your business model and operations allow it, consolidating loads will allow your company to avoid duplication of personnel and distribution processes. It is a decisive way to reduce transportation costs and to benefit from economies of scale.
Once merchandise from different companies is grouped together, it is possible to share goods that must circulate along the same route, but in a single transport unit. You will achieve a higher frequency of deliveries and the generation of economies of scale in transportation.
5. Choose the best transport companies
The transport operator is the last one to have a relationship with your customer, so choosing the best company is crucial. How does this affect costs? Undoubtedly, the biggest one is a dissatisfied customer. Choosing a reliable, punctual, efficient operator that brings visibility to the whole process of moving the cargo is essential. So is working with a company that understands the specific needs of the freight and the service.
Trucksters offer a service with air transport times at the cost of road transport thanks to a system of relays between drivers that relies on Artificial Intelligence and Big Data. This allows a 50% reduction in delivery times thanks to the fact that the freight never stops, which boosts efficiency.
Find out here how to move your loads faster, further and more safely.