4 Tips to Reduce Transportation Expenses

Costs associated with logistics include transportation costs as well. Getting a product from its point of origin to its destination can be a multi-stage process. You might tackle transportation in-house with your own fleet or power-only trucking providers. Some companies outsource to freight carriers, brokers, or third-party logistics providers (3PL). Depending on the distance and route, more than one mode of transport could be involved. There may be additional costs involved when cargo is transported from truck to ship, to train, and finally back to a truck for last-mile delivery when it is moved from truck to ship, to train, and then back to a truck.

It's important for transportation companies to plan for recurring costs, like fuel, vehicle maintenance, and insurance. There may also be expenses around driver uniforms, routing and dispatching software, and training employees.

• Reduce maintenance costs

Using a preventive maintenance strategy will keep assets in optimal condition. Preventive maintenance helps maximize availability and prevent malfunctions in assets. This strategy can cut maintenance costs by avoiding large expenditures of undetected failures.

• Route-finding

Creating efficient routes can minimize travel time and help meet delivery deadlines. Customer dissatisfaction can reduce revenue for long-term business. As well as minimizing travel time, efficient routes can also result in lower mileage. This can lower vehicle fuel costs and reduce wear and tear on vehicle assets.

• Increasing safety and minimizing accidents

Improving safety can benefit the logistics budget by avoiding costly stops. Late delivery of goods requires an additional fee. In a safety incident, violation fees may be imposed, costs of reporting the accident, releasing the driver, and ensuring the delivery continues to its destination. A good safety culture can cut expenses by supporting driver retention and hiring. Spending on security can also save you the cost of bad publicity.

• Prevent theft and misuse

Cargo theft is a very likely crime. This needs to be maintained in order to avoid losses. Starting with educating drivers in the practice of avoiding cargo theft. Keeping drivers up to date with the latest trends, such as how they can improve safety when refueling or during meal breaks. Replacing logistics transportation equipment is not cheap. Asset supervisors can help stay connected to equipment and people to prevent theft.

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