Integrated Logistics Insights

What Costs Are You Overlooking in Your Transportation Logistics?

Revenue Management

Freight is often thought of as a transaction. Businesses seek the carrier that offers the lowest freight quote and can help them conserve on costs for transportation logistics.

While this approach generates cost savings, it’s only a small piece of the puzzle. What businesses can sometimes fail to realize are the other underlying factors that can contribute to much higher supply chain costs.

Overlooked Costs in Transportation Logistics

Manual Processes

Every business relies on manual techniques to some degree. But in the field of transportation and logistics, 32 percent of companies depend on manual steps in more than half of their processes.

These manual approaches come with a cost. It’s true in the sense of the time and resources they require as well as the potential for introducing errors. Inaccurately matching up a freight invoice with the freight quote from a carrier is just one example.

Automating these manual steps not only improves the speed and accuracy of transportation logistics, but it also enables organization to better allocate their resources.

Lack of Technology Solutions

With tighter capacities and the demand for faster shipments, it may come as a surprise that many shipping companies have yet to embrace technology solutions. In fact, one survey showed that only 35 percent of shippers use a transportation management system (TMS) as part of their supply chain management strategy.

By choosing to invest in a transportation management system, businesses are able to maximize the efficiency of transportation logistics. Multiple freight quotes can be gathered simultaneously; shipments are easy to create and track; and shipping documentation is simple to store and access. These streamlined operations allow businesses to move at faster speeds and ensure compliance, both of which can lead to huge cost savings.

Poor Customer Service

Customer retention is a huge profit center for businesses. With even just a 5 percent increase, companies have the chance to boost their profits by up to 95 percent.

This of course requires good customer service. In the world of transportation logistics, good customer service is defined by round-the-clock resources—the supply chain never sleeps, after all—to handle service failures, create shipments, manage claims and more. Companies can leverage this as a means to build stronger relationships with current customers and also attract new customers to their services.

See Where You Can Reduce Transportation Costs

While some transportation and logistics costs are evident, others may be hidden beneath the surface. What’s important is that businesses have the ability to identify these overlooked costs and plan actionable improvements.

Working with the right 3PL provider enables organizations to do just that. The combination of industry knowledge and experience provides the foundation for optimized logistics solutions and a healthier bottom line.

To learn more about what to look for in a 3PL provider, download our free checklist.



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