Also striving for lower transportation costs? How are you tackling this?

The transport sector is showing signs of recovery after a turbulent period. But, as always, it’s absolutely not champagne sailing conditions yet. New times come with new challenges. Both for shippers and carriers. Understanding costs and bringing yourself in a position to proactively control and reduce them is considered a top priority in today’s boardrooms.

As a 100% independent 4PL we help organizations day-in-day-out achieving their ambitions and priorities. In this blog, we highlight some of them around creating cost savings.

1. Digitize administrative tasks.
Organizations that place their bet on digitization  see a solid boost in productivity and job satisfaction. An important step here is to standardize and automate communication between supply chain partners. In other words, sharing data and documents digitally by making smart use of EDI and API. Less paper, fewer e-mails, fewer phone calls and less handling around orders, transport orders, invoices, waybills, etc. Digitally connecting systems like an ERP and TMS allow organizations to respond faster to disruptions, plan better, minimise risks, increase customer satisfaction and therefore reduce costs across the board. Savings of 70% to 90% on specific aspects are no exception.

2. Compare carriers at shipment level and via a tender.
Next to automatically transfering your orders from your ERP to your TMS or 4PL partner you can also think about selecting and contracting multiple carriers and assigning them to specific lanes. A TMS or 4PL independent Control Tower is ideally placed to use techniques like dynamic carrier allocation at shipment level to immediately assign the best-suited carrier to a shipment. This can be based on different criteria of which price is an imporant one.

The group of carriers you select for this purpose can be brought together by executing a tender. A tender helps you find the best value for money. In addition, a tender also allows you to contract several carriers directly yourself. This immediately brings the savings of less subcontracting to you. Afraid of all the management? This is where a 4PL adds value. You work towards an optimal number of carriers in terms of coverage, price and required capacity and quality while through a 4PL you to continue to have a one-stop-shop.

Finally, it can be interesting to allocate a large share to a specific carrier. A carrier that exactly matches your shipment profile. This too will result in a more competitive price.

3. Use time slot booking or dock planning.
Dock planning or time slot booking eliminates unnecessary waiting times. The queue of drivers waiting disappears and that makes everyone happy. Carriers can reserve slots and know when they are expected. In the price, carriers can then factor in a shorter loading/unloading window and remove additional waiting costs. Warehouse managers can then also plan staff and floor capacity requirements accordingly. By distributing loading and unloading more evenly throughout the day, you avoid peak loads. The savings here are both in lower waiting costs from carriers and better staffing on the floor.

4. Know your ETAs.
As with dock planning and time slots, knowing your ETA (Estimated Time of Arrival) is crucial for managing your transport costs. Knowing an ETA helps with your staff capacity planning and brings a more efficient organization in work.

In addition, knowing an ETA and other milestones also helps you manage demurrage and detention costs, and it helps you prepare for activities earlier, making the whole process efficient and avoids surprises. Think of customs activities. having all kinds of documents ready on time, informing teams and maybe potentially even informing customers.

5. Consolidate shipments.
A TMS or independent 4PL Control Tower has a range of ways to consolidate shipments intelligently. For example, you can look at delivery window optimisation: Instead of daily delivery, can you switch to every-the-day delivery, or combine a shipment from tomorrow with one from the day after tomorrow by sending the former a day later or the latter a day earlier. By cleverly coordinating loading and unloading dates and times, multiple transport orders can be cleverly combined into 1 delivery. This leads to fewer separate shipments, lower costs and fewer empty kilometres.

Secondly, it is also possible to financially merge transport orders with the same pick-up and delivery location and the same carrier into 1 shipment. This too leads to lower costs and less administrative handling. A third option is to cleverly combine transport orders with a delivery date and address in a certain period and radius, e.g. 50 kilometres. We call this geographical consolidation.

Finally, a 4PL non-asset Control Tower can also operate as a 4C centre.  4C stands for Cross Chain Collaboration Centre. A setup in which we look for cooperation and synergy across supply chains with the aim of combining freight, reducing empty kilometres and thus saving costs for all parties.

6. Dare to let go and work together.
Do you still organise your own transport but is that not really your core business? Do you lack the time? Is complexity growing? Then explore the possibility of cooperating with a independent 4PL Control Tower.

Outsourcing all or part of the organization and optimization of your transport frees up time within your organization. Time you can spend on growing your business. In addition, you do not need to invest in hardware and software to set up and maintain an internal transport management system. By working together, you also automatically benefit from your partner’s knowledge and expertise and opportunities to create savings.

Finally, start with insight and building trust
Your agenda and the crazinesss of a day@work usually go hand in hand. It is also not easy to find and implement the right solutions every time. On top of that, everyone is good at something, but no one is good at everything. Creating savings starts with creating insights from data, by proactively working with a 4PL, carefully selected carriers and using smart technology.

Hopefully, the above you find helpful in achieving your ambitions. You may not be able to apply all of them and there are certainly more so see this as a starting point and if there is anything we can help with, we’d love to hear from you.