Man sitting down at a table in front of a laptop reading over logistics documentation with a large stockroom in the background

How to Reduce Logistic Costs

Is shipping freight an integral part of your business? If so, you probably face rising costs across your transportation logistics. Along with the typical price increase in equipment and fuel costs, a shipper may face budget pressures from various directions.

Monitoring logistics costs is essential to your business, and you may be actively seeking new ways to reduce these costs. Here at ExpressIt Delivery, we will provide you with five ways to reduce costs in a supply chain.

Challenges of Reducing Logistic Costs

If you are a business owner, you may be facing the difficult task of logistic cost reduction. The following are some of the challenges of reducing logistic costs:

  • Increasing demand for fast or on-time delivery: Today, the consumer demand for faster delivery times is greater than ever. Consumers want speedier delivery times for everything, from furniture to food. This increase in demand ripples down the supply chain, forcing shippers to identify new ways and funds to keep customers satisfied.
  • Driver shortages: Driver shortages across the nation have also contributed to increased shipping prices.
  • Ongoing restrictions and regulations: Staying compliant and adhering to emission reduction regulations can make it difficult for business owners to know where to cut costs.
  • A growing marketplace: The internet may be helping your business grow, but you also need to ship to your customers in a cost-effective way.
  • The need to keep up with changing technology: For logistics managers, staying up-to-date on new advances in technology and business processes has become a growing challenge.

If you’re a business owner, reducing costs is always one of your main focuses. The speed and number of recent increases in costs for shippers may put you in a time crunch to stay competitive. To ensure your business is successful, you should know how to reduce logistic costs.

5 Ways to Reduce Your Logistics Costs

Keeping track of freight costs is more crucial now than ever – and more challenging. Here are our top five methods to reduce logistic costs in your organization.

1. Use Different Methods of Transportation

You may be able to offset costs by being more flexible in the modes of transportation your business utilizes. Usually, shipping freight by air is more expensive than by sea. However, the time it takes to ship by sea may cost you sales. Stay updated on costs for the different modes of transportation and make a switch if necessary.

You may also want to consider intermodal transportation if you have traditionally depended on single modes. While rail transport is typically less costly than trucking, a combination of both may be the best way for your business to function on time and within your budget.

Mode flexibility may also help your business by minimizing the use of costlier shipping options. If your customer needs only part of a shipment sooner than later, you may want to expedite shipping for the whole shipment. However, it may be possible to reduce costs if you expedite only the freight that needs to get to your customer fast and use less expensive modes of transportation for the remainder of the shipment.

2. Embrace Automation in Your Logistics Process

Another way you might reduce supply chain costs is by embracing automation in your logistics process. If your business can track shipments from when they leave to when they are received, you can identify issues in your transportation logistics. This will give you real-time information on unexpected delays as well, allowing you to act quickly and more cost-effectively.

3. Improve Supply Chain Visibility

Overseeing and maintaining control and visibility of your supply chain may reduce any unexpected costs. By tracking and maintaining control over your parts, components and products in transit, you can quickly alleviate shipment delays or service disruptions. Alternate routes of distribution or supply can be implemented more quickly, and this contributes to better control of cost. Though you can’t predict disruptions in your company’s logistics process, if you use real-time dashboards, this can provide you better insights into mitigating possible issues later.

One of the best ways to reduce logistics costs is working together with your suppliers to minimize costs. In some cases, suppliers can cover direct logistics costs. If you develop a consortium of buyers to buy the necessary logistics supplies at a reduced cost because the supplies are being bought in larger quantities.

4. Look for Opportunities to Consolidate Shipments and Space

If you are seeking opportunities to consolidate your shipments, you may want to consider less-than-truckload (LTL) shipments. This is a convenient option for shipments of smaller weight. If you can consolidate shipments for different customers or products into a single shipment, you may be able to save money by using more full-truckload shipping.

You may also want to identify any wasted space and try to eliminate it. Your business can increase storage density by improving vertical space with bins and racks. This also minimizes the damage that shipping containers sustain by reducing movement during transportation.

5. Outsource to a 3PL Provider vs. Managing Logistics In-House

Outsourcing to a third-party logistics (3PL) provider can save you money and time. When you use a 3PL provider, you eliminate the need for investing in transportation, technology, space and staff members to execute the logistics process. ExpressIt offers logistic solutions for optimizing the logistic process and reducing costs. We are passionate about reinventing this industry, and our team of highly skilled employees can handle your delivery needs.

Our company will work with you one-on-one from start to finish, providing your business with custom, targeted delivery solutions. From on-demand and same-day to routed delivery options, our team will work with you to solve issues and find the solutions that exceed your expectations. With our transparent pricing, you will always know how much your logistics, warehousing or delivery services will cost.

Contact Us at ExpressIt Delivery

ExpressIt Delivery was founded nearly four decades ago, and we’ve been specializing in delivery and trucking services ever since, providing dedicated solutions to our clients throughout the country. Our customized logistics are backed by a team of experienced delivery professionals and specialists to support your delivery needs. We serve a wide range of industries, such as:

We know one size does not fit all. When you choose to partner with us, you can select the best service option for your business. We offer custom solutions that can meet your needs and exceed your expectations, including same-day, on-demand and next-day delivery. Contact us at ExpressIt Delivery to learn more about how to optimize logistics costs.