Is it possible to save money in logistics?

Saving in logistics operations is not synonymous with finding the cheapest option, savings in logistics and transport operations are not given trying to reduce the unit price. The real savings occur with the correct management of flows and operations and not by reducing the unit price of each operation.

Let’s give examples, imagine that we have an electronic commerce in which we have outsourced both the logistic operations (storage, preparation of orders etc) as well as the transport of delivery of our orders. The usual thing is to try to “adjust” each order preparation operation and each output shipment of our product.

But many times the biggest savings is not in these sections, what good is trying to have the best price for shipping if then we have a poor planning control of our stock and we have thousands and thousands of euros of products standing in the warehouse?

This is just a simple but very real example where the focus of savings is on the visibly more “striking” items, if we have 100 shipments and save € 0.50 each, they are 50 euros in savings. But what do those 50 euros serve us if then we have hundreds and hundreds of euros standing in the warehouse without selling?

Formulas for logistics savings
With the above, I do not want to say that the saving is not also in the control of transport costs but that we should look at other items that can weigh us more our numbers than the simple shipments.

If we have our own warehouse, the first will be as we had already talked in organize our warehouse, use square meters unnecessarily and occupy spaces without any criteria is to increase costs. If we organize our warehouse in a rational and adjusted to our activity and we will be providing a first logistical savings.

Another formula that we have also talked about a long time is to organize the goods in our warehouse in a logical way according to our activity. A bad organization can cause us that the time of preparation of orders increases in percentages over 30% that we supply it with more personnel that means higher logistic cost. Having grouped the products with the logic of our activity provides us with the necessary personnel to prepare the orders.

Another saving formula is about the “peripheral costs” of our activity, such as electricity, water, rentals, insurance, etc. Having insurance with an excessive premium increases the cost for each order we prepare. What is the use of tightening the transport if we then pay that supposed difference multiplied by x in concepts such as insurance?

Those of us who have experience in these adventures of logistics and transport see each other day by day to take action to lower the price of our services. Clients ask us one day yes and another but our job is to make the client see that there are other ways to save money, we all work to offer an excellent service but of course, we like to earn a living.

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