Cost Saving Tips – Logistics Management

Obviously the easiest method of reducing transport costs is to engage the services of a Freight Broker – like us! Freight People was one of the first brokers to set up in Melbourne when the founder, Paul Nicholson, recognised the need for larger companies to outsource their transport requirements in order to specialise on their own core business.

A broker has the advantage of close contacts with a vast range of carriers and ideally can capitalise on the bulk savings that it can negotiate because of the volume of trade.  In fact, a broker is an extension of the transport carrier’s sales team because it can bring business to their door without them having to lift a finger.  Why wouldn’t they extend discounted rates that can then be passed onto the client?  It’s a win – win situation.

Once a business has assigned their freight to a transport company they can then take advantage of their Freight Management System to streamline the process of delivering their product around Australia as well as the world. Technology is having an ever increasing impact on logistics, and this is helping to remove manual data entry and double handling.  A warehouse can enter the pick-up details onsite which are then transferred to the designated carrier as well as to the broker.  No more need for hand writing consignment notes – how many times has freight been misdirected due to illegible writing?

Another huge advantage is that the freight broker will audit the invoicing from the transport company. Often we find that there are errors made in either the rating of consignments or the cube rate has been applied incorrectly or fuel levies have not been costed appropriately. A business does not want to have their own staff constantly check each consignment that has charged by the transport company – as this costs time and money.

As freight brokers develop strong relationships with many and varied carriers, they are usually able to orchestrate various legs of a consignment’s journey so that they are seamlessly co-ordinated.  For example, if a load has to come from Far North Queensland to Far South Tasmania, several specialist carriers may need to be involved if one company does not service all particular areas.  Who wants to be worried about meeting their internal deadlines as well as frantically trying to organise the successful delivery of their precious cargo?

The diabolical mountain of paper work required to be processed when shipments are to travel internationally is frightening.  Again, why not hand over this process to an expert freight broker who has the experience to complete this in a flash?

So there you have it, the best cost-saving strategy is to outsource all procurement and logistics to a supply chain service provider (like Freight People) that has sufficient expertise in logistics and knows exactly how and where to save. By attempting to handle logistics in-house without the proper capabilities it will often lead to higher costs because it’s not part of the organisation’s core focus.  Businesses who attempt to handle logistics on their own run into a host of problems, calling in the experts at the last minute at a far higher cost than if they had simply outsourced the process from the start.