Developing an Efficient and Cost-Effective Transportation Strategy
June 25, 2019
An effective transportation strategy not only lowers operating costs for freight forwarders but helps increase their customer base. Adopting good practices and developing innovative solutions help increase efficiency so that businesses gain competitive advantage.
Choice of Transport
The first step to developing an effective strategy is learning more about different modes – rail, road, air, and sea. The choice of a transportation mode depends on factors such as timing, distance, location, cost, and types of goods to be shipped. Sea and rail transport, for example, are resource-efficient modes to ship large cargo across long distances and at a lower cost.
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Routing
When goods are shipped by road, improved routing helps reduce truck mileage and avoid empty miles. Making a delivery to a retailer or a warehouse and driving empty back increases operating costs. Improved routing is one way to avoid deadheading.
Collaboration and Load Optimization
Another way to avoid empty backhauls is to identify and collaborate with other logistics companies. At IFA, for example, members collaborate to ensure on-time deliveries, improve transportation efficiency, and expand the selection of services offered, including storage and distribution, small parcel delivery, and shipment of large cargo.
Load consolidation is one solution to combine freight and reduce mileage. Companies also collaborate in returning distribution materials such as stretch wrap, cardboard bales, empty containers and pallets, etc. Loads can also be optimized so that logistics providers use fewer vehicles to move goods. This can be done by increasing load height and ensuring that there are no voids to utilize the space available as efficiently as possible. Smart strategies to reduce mileage help reduce operating costs and greenhouse gas emissions and pollution.
Making Use of Technologies
Innovative solutions help improve operational efficiency and contribute to developing a cost-effective transportation strategy. There are advanced systems and software to store customer data, schedule outbound and inbound shipments, track rail containers, and control and track cargo receipt. Freight software also allows forwarders to calculate prices, post transactions, generate domestic and international bills and invoices, and manage receivables and payments. There are also tools to manage and generate documents such as derived and originating purchase orders, cargo status updates, booking confirmations, and advance shipping notices. Advanced software helps logistics companies to manage a wide variety of documents such as commercial, customs, ground, ocean, and air documents.
Innovative solutions also enable shippers to manage cargo delivery and storage, consolidate ground, sea, and air shipments, and track carrier performance. Some advanced systems are especially designed for sea freight management to help logistics services providers increase their margins and enhance asset utilization. They have access to multiple features for route execution and planning, freight settlement and audit, performance and visibility management, yard management, and dock scheduling. Other features allow for logistics flow control, transportation execution and planning, and pool distribution.
An efficient and cost-effective transportation strategy incorporates different elements to meet customer requirements, help identify revenue-generating opportunities, reduce expenses, and keep track of how well transportation bucks are spent.
