Managing Rising Transportation Costs

Posted by Land Link on Feb 9, 2018 10:09:47 AM


We Can All Agree

Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. The right technology will play an increasingly vital role in driving efficiencies across the global logistics network.

So How Do We Get There?

Cost cutting would appear to be the first step, and perhaps the least complicated to implement. Here are few ideas:

Move Supplies Faster

If you can find ways to expedite shipments from suppliers, you can order closer to the time you need the supplies. Ordering far in advance can incur warehouse costs, because you will have to store them so that they'll be available, and products are more likely to get lost or damaged. In addition, examine whether you can shorten the time it takes you to transport supplies from where you receive them to where you need them. Transportation from the supplier and within your company can add days or weeks to your supply chain and increase costs.

Review Customer Demand Patterns Frequently

You may have established your supply needs based on a pattern of demand that is outdated. It can be cost-effective to evaluate customer-demand patterns frequently to see if your seasonal and even monthly assumptions hold up. Adjust your supply ordering based on your most recent evaluation, and you will be ordering in a way that's more closely tied to what you really need to have on hand. You can keep some safety stock in case your assumptions are wrong, but there is no need to stock up for demand that never materializes.

Streamline Your Ordering Process

Part of your supply chain costs come from your ordering system. If you have multiple people filling out requisitions, using multiple software or even paper checklists, you could be over-ordering. In addition, if there's no approval process and individuals have the power to order supplies whenever they want, you could be ordering things you don't need. Examine your ordering process to see if it is causing waste.

Technology is the Mortar Which Will Bind a Sound Supply Chain Foundation

These strategies are old school. If you have not already implemented these basic protocols you’re in trouble from the start. Everyone knows the key ingredients in any supply chain cake batter is technology. But which ones are right for your needs? Herein lies the rub. Who even knows the latest applications and their exact implementations? I consider myself well educated on this data, but I find myself questioning which protocol may be best for which application. Add to the complexities the rate at which the technology is evolving.

IOT; The Internet of Things

We have delved into the Internet of Things in many previous blogs. Just to reiterate, and put it in it's simplest terms, IOT is the linking of devices over a common connection, (the internet) to function at its optimum capacity through the use of complex software and high-speed communication channels. I realize that's a mouthful but just think of how fast that sounds.

Block Chain Technology

Again, we have discussed the theory and applications of block chain technology in many blog articles. Block chain technology will be vital in applications such as IOT. When we have billions of processes wired together at the speed of the internet block chain applications will be the watchdog technology which allows for an audit trail for compliance issues from every imaginable protocol.

How Can You Possibly Keep Up?

There are many more advancements from RFID (Radio Frequency Identification) to Chipping, (Implanting tracking devices within pallets or packaging) to advanced video monitoring technology that we could spend hours detailing. But I think we'll end our discussion with some food for thought. What are you shipping? How valuable is you brand? Is your current supply chain system adequate to safeguard it? Remember how much the Tylenol issues cost that brand or the Salmonella outbreak at major restaurant chains. It only takes one break in the supply chain to bankrupt a brand.

The only way to keep up is to seek the guidance of industry professional in today's technological environment. Contact us today at for a complimentary review of your current supply chain protocols to ensure maximum efficiency.

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Topics: Supply Chain Management, Logistics Business, Shipping News, Technology