How much are you spending on inbound freight costs?
In her recent Entrepreneur.com article, How to Control Your Inbound Shipping Costs, author, Samantha Blake states that “depending on the industry and size of the company a business can spend 40% of its annual freight budget on inbound shipping.”
Because it is an area with such a high level of expenditure (and with a large number of variables impacting the total spend) the cost of inbound freight is not something to be ignored. Whether you choose to work with a 3PL like G&D Integrated to help you streamline your inbound shipping from multiple providers or decide to handle it on your own, it is important to periodically conduct reviews with your individual suppliers and look for opportunities for improvement.
Not sure what to look for? Blake’s article offers the following five strategies to cut inbound freight costs and streamline workflows:
- Find your actual costs
- Know what is negotiable
- Standardize your inbound shipping processes
- Optimize your processes
- Stress compliance
If there is any doubt in your mind that a close review of your inbound freight can impact your bottom line, consider this: G&D saved one client $1.25M annually just by implementing milk runs that resulted in a more streamlined, cost effective inbound supply chain. Not only that, they reduced total process time for materials transported by 36 hours.
How they did it:
- Consolidated transportation—Instead of each supplier delivering individually, G&D designed and executed a flexible dedicated fleet solution to handle the transport of goods from ALL suppliers. In doing so, we worked with each of our client’s suppliers to remove the cost of transportation from the material/component cost. Ten trucks were allocated to the effort, and runs were set up to get the maximum use out of each truck in the most efficient manner possible.
- Established local logistics centers—To further optimize productivity, G&D established localized logistics service centers in Chicago and Peoria, IL, in the vicinity of the manufacturer’s assembly facilities. From those centers G&D orchestrated truckload operations to optimize performance through static runs to all suppliers within a 150-mile radius of the client’s plants.
- Implemented a supply chain tracking system to track the effectiveness of the process.
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