Logistics cost is one of the most expensive parts of a business. It is therefore very important that there is a deliberate focus on opportunities to reduce costs and at the same time. Doing it the wrong way can produce disastrous outcomes and might end up costing more in the long term and over the total end to end supply chain.
Here are 4 ways to reduce inbound logistics;
1. Volume:
Volume is a key point of leverage for shippers. The larger the piece of the pie a carrier is offered, the better the rates, tariffs, and service they may offer the shipper. If you’re using two dozen different carriers for your shipments you’re likely going to have to play the spot rate market and your freight may suffer due to market volatility. By consolidating the number of carriers you use you may be able to reduce your overall cost.
2. Create and Implement strict processes:
Creating and Implementing strict processes for managing inbound freight can go a long way towards reducing costs, especially when it comes to making claims. Teams should be trained on freight acceptance protocols, which begin with a full inspection of deliveries to identify any visible damage or shortages. For example, if your freight is equipped with temperature indicators, teams should be trained to check those indicators and the process of refusing packages that have been compromised.
Because carriers have increasingly strict rules regarding claims, especially when it comes to concealed damage or shortages, it should be a matter of policy to inspect the content of shipments within 12 hours of arrival to meet those requirements. These standard operating procedures, which should also include guidelines related to ancillary services, delivery refusals, and invoice auditing, should be regularly reviewed and analyzed to ensure your business isn’t paying more than necessary for inbound shipments.
3. Enhance visibility with technology
One of the crucial factors of successful inbound management is high visibility into the supply chain. Thanks to technology, companies can track their shipments through the transportation management system
Supply chain executives can set their own terms and conditions for suppliers and vendors with the help of inbound software. This includes deciding which parties will enter the shipment information. One option is to have the supplier enter the shipment information so that the logistics team can be notified and book appropriately to meet business requirements. Alternatively, the executives could designate the supplier to directly book with preferred carriers and suppliers, which results in reduced costs. Either way, it is always at the discretion of the executives to determine the best process based on inbound software insights.
4. Take Control of Your Freight Schedules
You can also reduce shipping costs by making sure that you control your shipping schedules and routes instead of allowing vendors and suppliers to control them. When they control your shipping schedules and routes, they can add on freight accessorial charges. Accessorial fees and charges extra charges for loading and unloading cargo, long hauls, and fuel increases and surcharges.
The problem with accessorial charges is that they are often added after truckload freight delivery arrives, so you have no idea what you’ll be charged until after you use that vendor’s or supplier’s freight services. You can avoid these accessorials by making sure that you are the one who sets the routes and schedules. When you have control of these aspects of shipping, you can optimize them to minimize your costs.
At Edas Global Supply Chain Limited, we will work with you to help you optimize your shipping process so that you stay within your shipping budget. If you are interested in our logistics services or if you have any questions about our other services, contact us today.