With the ever-growing complexity of global supply chains and rising customer expectations, many businesses are looking for ways to reduce logistics costs. Logistics costs are typically some of the highest within a business’s operations – going beyond transportation and covering aspects such as inventory management, warehousing fees, and order fulfilment services. While there are a variety of strategies companies can use to save money on their shipping and warehousing operations, there are also some mistakes they should be sure to steer clear of in order to ensure major savings. In this blog, we’ll dive into the key errors that companies should look to avoid if they’re committed to saving money while keeping up with great delivery standards.
1. Neglecting Security Standards
Logistics costs can have a tremendous effect on businesses, large and small. Implementing security measures to reduce logistics costs is an endeavour that companies across different industries are beginning to undertake. Security solutions like GPS tracking services, biometrics verification and tamper-proof containers can not only help to significantly improve logistics visibility, but also prevent loss of cargo through theft or protect your business from malware attacks. Furthermore, investing in logistics security solutions could result in shorter transit times, improved delivery accuracy, and increased customer satisfaction – creating a win-win situation for all involved.
2. Not Negotiating Rates with Carriers
Effectively negotiating logistics costs with carriers can have a huge impact on the bottom line. By considering various details such as shipment size, package weight and delivery times, logistics managers have the opportunity to get the most competitive rate. That said, negotiations should be conducted thoughtfully and strategically in order to ensure that logistics costs are reduced without compromising service quality or sacrificing other important aspects of the logistics process. Additionally, logistics experts must stay up-to-date on industry trends and current market prices in order to negotiate fair terms beneficial to both parties. With an eye for detail and an understanding of the logistics landscape, logistics managers can be successful in minimising logistics costs by effectively negotiating with carriers.
3. Forgetting to Track Your Spending
Logistics costs can rapidly add up and take a large bite out of your budget, so it’s important to track your spending for your various logistics processes. This discipline helps you to identify any inefficiencies so that resources are assigned in the most effective manner, thus reducing logistics costs. By understanding patterns and trends occurring in logistics spending, businesses can better adjust their processes to optimise spending and minimise logistics costs across the entire organisation. Additionally, regularly monitoring logistics data allows a company to quickly adapt by recognising any areas where they might be overspending. Taking the time to track logistics expenses may require a more proactive approach than many companies are used to, but it can greatly reduce logistics costs and improve performance.
4. Not Streamlining Your Supply Chain
Streamlining your supply chain is essential to any business, as it can significantly reduce overhead. It begins with careful planning and implementation of strategies that will help you improve logistics planning, materials purchasing, inventory management, transportation management, in-plant logistics and customer service. By having effective logistics processes in place, you can better manage the flow of goods from one point to another, allowing for more efficient storage, transportation and delivery of goods to customers. Furthermore, streamlining your supply chain helps to reduce shipping waste such as empty trucks and wasted fuel that you could possibly be spending your money on. In conclusion, implementing a streamlined logistics model designed to reduce logistics costs is one of the best investments you can make for your organisation’s future.
Choose Halcon Primo Logistics Today
Halcon Primo Logistics is a leading logistics company in Singapore that aims to deliver cargo shipping solutions that will undoubtedly add value to your business’ supply chain management. Contact us to find out more about our wide range of logistical solutions today.