5 ways to save money when expanding logistics scale

Businesses can save on logistics costs by consolidating shipments, consolidating freight, upgrading technology, regular audits,...

Today's logistics services are not only logistics, but also play a fundamental role in the success of businesses. However, costs are increasing in this industry, in the US alone, logistics costs have increased by 22.4% in 2021, reaching 1.85 trillion USD. Most businesses are looking for ways to save, not just cut costs with logistics services. They are aiming to scale up their operations. Here are the most reasonable and cost-effective options for businesses in the current context.

Savings in logistics operations is an issue many businesses are interested in

Consolidation of shipments

This is the most obvious strategy to cut logistics costs, but it is still important to note that shipping all goods by container is often more cost-effective than fewer containers. Even if the entire container doesn't hold enough shipping capacity, it can still be a more economical option.

When shipping all of your goods at once, it takes less time to handle, thereby reducing the risk of damage. However, there will be times when shipping with fewer containers will be more beneficial for a business, as there are express delivery options and more flexibility in logistics.

Fees included

Many businesses are aiming to combine goods to reduce shipping costs. Some businesses themselves are also saving on shipping costs by consolidating multiple orders in the same market. In addition, consignment consolidation can also reduce the cost of delivering to a specific market because the shipment is already in the region. Other benefits can be mentioned as saving transportation time, loading and unloading fees and reducing the amount of overloaded goods at the docks.

Technology upgrade

Digital transformation is a common trend, the logistics industry is no exception. In fact, many new technology solutions will not work well when integrated on an outdated logistics technology platform. Switching to a modern cloud-based system can be a viable solution for logistics businesses.

First and foremost, businesses need to find a single technology platform provider that can access information across the entire supply chain. Greater visibility will help you avoid any risks of reduced operational productivity and unnecessary costs in the process.

Data integration is also an important feature as it provides the means to collect and analyze logistics data. From there, owners will get insights to build future strategies. The potential to identify bottlenecks alone can be hugely beneficial in increasing the profitability of a business. In addition, it is also beneficial in reducing price differences, optimizing routes, improving accuracy of last mile delivery, etc.

Besides, artificial intelligence (AI) and many current technologies also bring opportunities to improve business for businesses.

Fleet cost control

When it comes to saving logistics costs, businesses often overlook one of the most important solutions, which is to manage and invest in transportation fleets. The investment in the vehicle system can be difficult in terms of price, but other factors play a more important role if the business knows how to buy from a reliable place, durability, maintenance ...

Regular audits

Currently, businesses should automate the audit process to save time and get the most accurate results. Automation can bring together all customer invoices and transactions on a single centralized platform, allowing businesses to track and report errors.

Efforts to change the way logistics operations are never superfluous for businesses. At the same time, systems also require regular monitoring as they scale. New technologies will emerge, new processes will be introduced and new disruptions will also likely shake the logistics industry once again. Customers need to know that logistics always contain the potential to save costs.

Phi Hung (Source:Global Trade)