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International Forwarding Association Blog » International freight services » Ways to Reduce Staff, Warehousing and Transportation Costs  

Ways to Reduce Staff, Warehousing and Transportation Costs  

If you are specializing in freight management and logistics, chances are you are faced with all kinds of expenses associated with storing and moving cargo, including fuel, warehousing, insurance, and labor costs. With inflation and ever-increasing prices, international freight forwarders are forced to optimize supply chain procedures to reduce costs. While improving your bottom line may look like a challenging task, here are some costs to account for and some tips on how to keep expenses down to grow your business.


Reduce Staff, Warehousing and Transportation Costs


Shipping Costs to Account for

Shipping costs are paid to a range of businesses, including freight brokers, carriers, third-party logistics providers, and trucking companies. Freight forwarders calculate costs in a variety of ways, and some include components like inventory depreciation and value-added services such as reverse logistics and data reporting.

Today, an increasing number of logistics companies also invest in advanced technologies to streamline their operations. A significant chunk of their budget goes toward next-gen technology like automation, robotics, artificial intelligence, and enterprises resource planning. While robotics and automation are gaining prominence, some procedures and types of cargo still require humans for handling and in the decision-making loop. Logistics companies need to account for the human element and associated staff and labor costs.

Strategies to Reduce Logistics Expenses

Employee and Staff Costs

The first step to optimizing costs is ensuring your employees are productive, motivated, and performing at a low error rate.  You need to provide practical and sufficient feedback to your teams, along with access to employee engagement initiatives like healthy office snacks, wellness workshops, gym membership, etc. As well as motivating your employees, investing in cost-effective automated solutions can help improve productivity and workplace safety. Examples ca be inventory control systems, drones, autonomous mobile robots, and stacker cranes.

Warehousing Costs

When it comes to warehousing, there are some questions worth considering. How effective is the setup of your packing stations? Are you making the best use of your warehousing space? Is the layout optimal? Storage optimization is key to keeping costs down. To this, it is essential to account for factors such as product placement, warehouse flow, physical structure, and retrieval methods. Also, having proper theft prevention and identification procedures in place is key to preventing inventory shrinkage and financial loss. Red flags to watch for include items found close to loading bays and exits, unusual or missing invoices, dip in sales, and a mismatch between your sales records and inventory levels.

Transportation Costs

There are a number of ways to keep transportation costs down depending on the modes you commonly use. For land transport, for example, it is important to provide truck drivers with optimal routes to ensure fast shipping and avoid delays. Well-optimized routes help ensure that cargo doesn’t get stuck in road traffic and trucks aren’t running half empty. The most important factors to account for include load and weight capacity, avoidance zones, one-ways, sunset and sunrise times, weather conditions, and traffic.