Ways to Reduce Logistics Cost:
There are two basic methods to improving the cash flow of a business, increasing revenues and cutting costs. When it comes to curtailing the cost of how you do business, addressing your international logistics may provide healthy savings for the company by cost reduction in logistics management. Shipping products, materials, and equipment around the world in global logistics is complex and for larger companies must be run by someone who hold a recognized supply chain management degree. However, companies large and small can increase their efficiency and reduce logistics cost by following a few simple tips.
Tip 1: Use Air Freight Only for Emergency Shipments:
Air freight is very expensive and in most cases not needed if you set up a system that works with the customer or client where you are shipping the items. If you plan ahead to reduce logistics cost and work with your clients, air freight should only be used in emergencies when it has to arrive quickly. Otherwise, traditional methods should work well and you will save a considerable amount of money.
Tip 2: Better Planning for Global Logistics:
Planning your logistics starts with an overview of how you are currently running your shipping, where it can be improved, and how to reduce logistics cost. Cost reduction in logistics management by reducing air freight is a start, but you really need to look at your overall shipments and see where they can become more efficient. It helps if you can hire someone who has earned a good logistics qualification, like diploma in logistics and supply chain management, as good expertise are developed in supply chain management, logistics management, green supply chain management, etc.
Tip 3: Use Full Container Loads to Improve International Logistics:
Another way to increase efficiency is to be sure that your goods are being shipped in full containers (FCL) rather than half or less of a container (LCL). In addition, going LCL means risking more damage to the goods as they can shift around inside when in transit. When you consider that going with less that a full container means you are really paying more to ship your items, it really helps to go FCL whenever possible.
Tip 4: Consolidating Goods:
If you do not have enough items to ship FCL, then you can ask to consolidate them with the items from other companies to reduce logistics. Along with the cost reduction in logistics management, it will slow down the shipping time somewhat since the items will need to be packed and sorted separately, but it can save you a considerable amount of money. For customers who are willing to wait a little longer, consolidation is a good way to go.
Tip 5: Identify the Best Inland Transit Options:
This means locating transportation systems that provide the best combination of speed, efficiency, and price. The two most viable options are rail and full truckload service (FTL). Rail is highly efficient for larger volumes of goods to reduce logistics cost, while FTL is better if you are shipping a smaller number of items. You should avoid dedicated trucks as they might be faster, but they will cost more money.
The greater efficiency you create when shipping items overseas, the more money your company will keep by cost reduction in logistics management. It pays to always keep an eye out for the most efficient shipping methods that meet your customer’s needs while saving you money. If you are interested to develop and skill in International logistics, we recommend you to study logistics courses and supply chain courses, which are offered by AIMS’ institute of supply chain management through an interactive learning system.