The ERP platform play: Cheaper, faster, better from McKinsey
5 Tips To Save Money On Freight And Logistics
five ways you can save some money on Freight Forwarding.
It's getting expensive to manage manage your supply chain operations due to inflationary pricing, shipping capacity, Demand disruptions and demanding customer expectations. To stay competitive and profitable, you need to fulfil your customers satisfaction and also also find a way to do it efficiently and cost-effectively. Here we're going to discuss 5 ways you can save some cost without cutting the corners.
Consider Freight Consolidation
it can lead to significant savings by sharing transportation costs between multiple businesses, allowing companies to get better rates on shipping services. Some of the advantages of consolidation can be;
- Reduced shipping costs by sharing costs
- Reduced damage due to less handling
- Lower fuel emissions
- Streamlined transit times
- Less crowded docks
But there is also a downside;
- It requires more communication and coordination
- Typically requires shorter leads times on shipments
- And it does not work as well for reverse logistics
Many companies' biggest challenge with freight pooling is that they lack the infrastructure, expertise, or time to coordinate pooling. You will need intelligent enterprise logistics tools to optimize the planning, execution, and workflow to efficiently manage all of the complexities.
2. Check with Transport Management Systems
Similar to how airlines operate, some carriers offer better pricing for certain legs of a trip than others. You can often save thousands of dollars by combining carriers, adding or switching lanes, or adjusting service levels. One tool we can refer is Freightos.
3. Automate the Processes
Digitizing logistics has been a hot topic for a few years now. Right now, we are transitioning into it. Reducing manual tasks and data entry should be at the top of your list to improve efficiency and reduce costs. Deploying a smart Freight Management platform that enables automation is the first step. The right automation systems lower overhead costs while making everything happen more quickly and seamlessly.
For example, how many of these functions are you currently automating?
- Inquiry Management
- Tariff rate management
- Carrier rate management
- Accessorial fee management
- Invoice management
- Customer shipping notifications
- AWB, MBL, HBL & other Documentations
- Multi-leg shipping
- Returns processing management
- Real-time freight rates
- Real-time tracking
- Customized reporting and analysis
4. Conduct Audits
No matter how efficient you're, invoice exceptions occur. Late shipments, lost shipments, and wrong rates and accessorials get charged. Freight auditing is crucial, yet many companies often skip this step and leave money on the table.
Carriers don’t always make it easy for you to compare quotes to shipment, so often, areas where you could make a claim get lost in the shuffle. There’s money in freight audits. Using electronic data interface (EDI) invoicing, you can automate the process to bring all of your invoices into a centralized platform for greater visibility and auditing.
When you consider that between 5% to 10% of all deals do not meet delivery requirements, the savings can add up quickly when you conduct freight audits. You need a system that can conduct audits, searching for things like:
- Duplicate charges
- Inaccurate NMFC codes
- Rating errors
- Incorrect weight
- Accessorial fee errors
- Applicable tax applied correctly
Using shipping software (aka Shipmnts) to catch errors digitally and then designating a staff member to follow-through on exceptions.
5. Employ Business Intelligence
Business intelligence in freight means you must capture your logistics data, analyse it, and use insights to inform your future strategies and decisions.
Stage 1: Descriptive Analytics, (What happened?)
Stage 2: Diagnostic Analytics. (Why did it happen?)
Stage 3: Predictive analytics (What will happen?)
Stage 4: Prescriptive analytics (How can we do better?)
With Shipmnts' customised reporting you can generate department, location and branch specific reports at ease. It will give you realtime notifications on where things can go wrong and you can assign it to a dedicated resources.
You can always get in touch with us to streamline your Operation and to uncover More hidden ways to save money. We will be happy to solve any of your freight related bottleneck with tech deployment. We believe in idea of co-creation where forwarders are equal participant in building next generation solutions.