Perhaps one of the biggest challenges for any haulage and distribution company is how to go about reducing costs. The real difficulty is not so much reducing freight costs as that is pretty easy. The greatest difficulty comes with reducing the cost of your freight logistics whilst at the same time ensuring that your customers remain happy. In fact, this is incredibly difficult. On this page, I am going to introduce you to a few of the methods that some of the biggest players in the haulage and distribution world have implemented to reduce costs without compromising the happiness of their customers.
Cutting Freight Costs with logistics software
Perhaps one of the biggest changes you can make to your freight logistics will be through the software that you utilise. There are many companies out there who will use two different systems. One for order entry and the other for actually processing the order down in the warehouse. In fact, one study seemed to indicate that about 90% of warehouses currently do this. The problem is that when you use more than one system, the margin for error is considerably higher. This means more products shipped out needlessly to customers, which will in turn lead to them being returned, which will, of course, result in high costs on your part. Customer satisfaction will also be reduced. A single system will also help to reduce the amount of labour and training needed, which is another way in which you will be able to cut the cost of your freight logistics.
Using a barcode system
Cut down on the paperwork in your business. Seriously. Hours upon hours each and every week will be wasted by your team members in dealing with paperwork. This may, for instance, mean confirming that the order has been packed. A barcode system may be slightly better for you. All you need to do is scan that barcode at the time of pick and you are good to go. Hours will be shaved off your staff’s time each and every week. You can then pass these savings onto your customers. There are a number of barcode systems out there. Finding the right one for your business should not be all that difficult.
Automated shipment planning
If you are shipping out a lot of product, automated shipment planning systems may go a long way. These systems will automatically tell you how best to fill your vehicles for maximum efficiency. This will greatly cut down on the amount of time that your employees will need to spend on stacking over and over again. It will also ensure that you are able to ship more products on each vehicle which will, in turn, lead to a reduction in the cost of transport. Customer satisfaction will not be compromised in the slightest, providing the system has been set up correctly, at least.
If you have multiple warehouses, you may wish to look into sourcing products based on the workload of a particular warehouse. This means that new orders will be sent to the warehouse which is not operating at optimal efficiency. This will ensure an even spread of work and will also ensure that no man hours will be wasted.
There are a number of ways in which you can reduce the freight costs of your company, but the tips above are a good start. It will not be cheap to implement these ideas, but they will pay off dividends in the long run.