4 tips to save on logistics costs

In addition to production, logistics management is also among the highlights for a company. To be profitable, it must ensure good management of its logistics. This must be done not only at the level of task planning, but also on cost reduction. The stakes are high, because we will have to find the right formula to reduce costs while preserving the quality of service. Otherwise, you will lose customers. Here are some tips to save on logistics costs and increase your turnover.

Logistics: focus on optimizing packaging costs

It is an essential element, but which has a certain cost in a company. L’packaging is surely one of the most important aspects in the presentation of a product. But it is just as important to ensure its safe transport and storage. It cannot therefore be excluded from the logistics part. If we cannot eliminate it from current expenses, we can nevertheless reduce it.

Packaging is primarily used to store products and goods in warehouses. To reduce costs, it is essential to carry out an analysis of the factors that could increase costs. How are the products stored in the packaging? How much can they actually hold? Are they more profitable in one format than another? What type of packaging covers storage, handling, transportation and distribution? These are questions to think about to reduce packaging costs.

Packaging can take on several aspects: cardboard, wood, steel, etc. Everything will depend on the products and the purpose of the packaging. There are the primary packaging, intended for sale in units, the secondary, for products in quantity, and tertiary, for large loads. For the latter, the most famous are wooden pallets, which are infinitely reusable. You can opt for wooden pallets for sale at discount prices or to rent, depending on your needs: study which option will be more profitable for you. Please note that wood is a material that preserves well. Barring major shocks and poor maintenance, your pallets will last you for years. Using wooden pallets, whether for handling or transporting your goods, will save you significant money.

Logistics management

When it comes to primary and secondary packaging, be sure to eliminate unnecessary costs. Start with optimize your packaging in order to keep only what is strictly necessary. This can be in terms of dimensions, shape, inscriptions and other details. If possible, turn to service providers who can produce tailor-made packaging.

Review transportation costs

Regardless of the size of the company, transportation is a key element of logistics. It is both delivery of products and transportation of raw materials. Reducing costs in this area therefore represents a real headache. To optimize your spending on this item, several factors must be taken into account.

Start by choosing the mode of transport carefully, whether for your supply or for the delivery of your products. For international transport, prefer the sea to the air, this will save you almost 80% on transportation costs. For maritime transport, do not hesitate to renegotiate prices.

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Whether at sea or on land, think about pooling of transport costs. This practice makes it possible to optimize vehicle filling and share costs with other companies. The more you are “in the same boat”, the less you will pay. The pooling of transport will nevertheless require a certain organization in terms of orders and transport frequency.

For the delivery of your products, you can offer the collaborative delivery to your customers. This practice works like carpooling. Delivery will not be made by a professional, but by an individual registered on a platform or an application dedicated. With this method, you will incur little or no transport costs.

Finally, pay attention to the packaging. It also impacts the cost of transportation. This will depend on the volume or weight of the goods. Therefore, choose suitable packaging that can contain as many products as possible, without risking damaging them.

logistics application

Manage stocks as best as possible

Good inventory management is an essential point in reducing logistics costs. Indeed, storing merchandise inventory can be expensive. It will be even more so if the company has to rent the storage premises or the transport vehicle. Good inventory management involves knowing the goods thoroughly as well as their frequency of sale. Holding inventory for too long can pose a risk of no sales. Keeping too little could penalize you in the event of a stock shortage. The idea is to analyze the flow of goods. Identify which products sell the fastest and which have difficulty leaving.

This task involves some logistics. The ideal would be to move to a computerized system intelligent which optimizes stocks for easier management. This will then allow you to check the goods easily. The computer system will tell you when the stock reaches the minimum or maximum of the recommended threshold. In this case, you will have to choose between stocking up or implementing a strategy to sell the products quickly.

Reduce procurement costs

The supply chain is one of the key elements of a business. It allows goods to be managed so that they can precisely meet customer needs. It is therefore important to implement an effective purchasing strategy to make sales profitable. The main thing is to be able to plan the strategy based on inventory, transport and even suppliers. In some cases, it is entirely possible to negotiate prices depending on the service providers. Sometimes discounts can be granted based on a certain order threshold or based on customer loyalty.

Regarding the purchase of products, it is also possible to place group orders to benefit from price reductions. If you do not feel capable of managing this aspect of procurement, you can call on consulting firms specializing in this topic.