Three Ways to Control Shipping Costs
July 20, 2022
Originally featured in SBAM’s FOCUS magazine
Businesses often underestimate the power of the supply chain within their organizations. Many parts make up the supply chain, but one that has been brought into the spotlight in the last year or so is transportation.
With all the disruptions—from COVID to the worker shortage to the war in Ukraine—businesses are feeling the weight of rising transportation costs, inflated fuel prices and diminishing profits, especially in the small to mid-sized markets. Since a lot of these businesses don’t have the resources or expertise to navigate through the disruptions, they need to find ways of cutting costs to remain profitable.
This often results in lower product quality and lower customer satisfaction. In a world where customer expectations are at an all-time high, sacrificing quality and service to generate more profit only makes it more difficult to run a sustainable business.
What if you could create a healthy supply chain where you didn’t have to sacrifice quality and service AND remain profitable through the ups and downs of the transportation market?
Well, good news for the small to mid-sized business owner—you can! Here are a few ways to create a sustainable supply chain to ensure your business is healthy despite the constant disruptions within the transportation space:
Expand Your Carrier Network
In the truckload market, having the right carrier network will help mitigate risk when capacity tightens and rates spike. It’s important to have a good mix of asset carriers (who own their own equipment) and brokers that can help connect you to the smaller, one-off carriers looking for work in your area.
For smaller businesses using less-than-truckload (LTL), brokers are often preferable to individual carriers. You can leverage brokers’ blanket pricing that small businesses might not be able to get. Most LTL brokerages have good relationships with both national and smaller regional carriers that could be a good fit for your needs.
Contrary to popular belief, UPS and FedEx are not the only players in the small package/parcel game! It could make sense to explore regional options that will help expand your carrier base, drive down costs and improve or maintain the same service level to satisfy your customers.
Leverage Technology and Data
Utilizing technology to execute your transportation strategy and gain visibility into how your strategy is performing used to be a luxury. Today, it has become a necessity to get the most out of your supply chain.
Streamlining shipments through a single platform will help drive out inefficiencies in execution and maximize output from your employees. Leveraging technology that contextualizes data will empower you to have greater visibility into what is driving transportation and product costs, with additional metrics to help you make more informed decisions based on supply chain data.
Partner With a Transportation Provider
Partner with a transportation provider that offers technology along with human expertise. Technology is an extremely costly investment. Partnering with a company that specializes in transportation solutions and has invested in leading technology for their client base will drive value for the small to mid-size shipper. This is an affordable and flexible way to meet your specific operational and financial needs.
Although we are in an era where technology is king, technology is nothing without the brains behind it. To stay ahead of the game, find a partner that will provide you with industry expertise, keep you updated on the state of the market, ensure you have the right strategy and work with you to continuously make improvements. A healthy supply chain equals a healthy business. Expanding you carrier network to create the right carrier mix, leveraging technology and real data about your supply chain, and working with a knowledgeable transportation partner are just a few ways that you can turn your supply chain from a cash burner to a sustainable advantage.
David Brosky is the Director, Strategic Sales at Transportation Insight Holding Company (TI Holding Company), which is the parent company of industry leading 3PL logistics providers Transportation Insight and Nolan Transportation Group.