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HOW LOGISTICS COSTS CAN BE REDUCED


The need to reduce cost is the number one priority for a business’s net profit. According to Statista.com, global logistics cost amounted to about 9.1trillion in 2020 and is expected to keep rising in 2022. The presence of constant rising costs along the transportation process coupled with the rising cost of fuel and equipment can be overwhelming. To be able to reduce cost shippers have to constantly monitor the logistics market so as not to be caught off guard, and to be able to know how to maneuver the constant rise in cost. Here are five methods to help reduce costs.

  • USE DIFFERENT TRANSPORTATION METHODS

Be more flexible in the modes of transportation that suites the business. Shipping by sea is cheaper than air but ocean freight is more time-consuming and hence may affect sales so, in monitoring cost, you will be able to make the necessary switch when needed. You may also want to consider intermodal transportation and mode flexibility. When considering expedite methods for urgent shipping, only ship the particular goods that are needed sooner than later, then use a less expensive method for the rest of the shipment.

  • SUPPLY CHAIN VISIBILITY

By tracking and maintaining control and visibility of your supply chain, you can properly manage and contain any disruptions. Alternate methods can be implemented and although it is almost impossible to predict disruptions in your supply chain process, you can handle them in time hence better management of cost.

  • OUTSOURCE LOGISTICS TO A 3PL

Outsourcing logistics to a 3pl (third-party logistics provider) could reduce costs immediately. In maintaining a larger network of warehouses and fulfillment centers coupled with their specialization in logistics, they can offer complete service customization and end-to-end logistics solutions.

  • USE AUTOMATION IN THE LOGISTICS PROCESS

In monitoring the movement of a shipment from its departure to its final destination, you will be well and timely informed of unexpected delays. This will permit you to better contain hurdles and resolve issues cost-effectively.

  • CONSIDER WAREHOUSING

When shipping over a long distance, consider storing products closer to customers to reduce transport costs. Apply security considerations, get a safety manager to ensure the operations of the warehouse are safe, and try as much as possible to avoid government fines.

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