There’s no such thing as free shipping.
Inbound shipping costs refer to incoming freight transport, storage as well as delivery of goods cost borne by a company. It is essentially the cost of shipping goods from your production site to its final destination.
A cost-efficient and effectively controlled inbound chain is a result of a number of efforts. Some of these include determining CPU, allocating company resources, inter-departmental collaboration and more.
This post will discuss how businesses can use these strategies to successfully reduce their inbound shipping costs.
Determine Cost Per Unit (CPU)
Although it might be difficult to break down your freight expenses into costs per unit, it’s an important step to gain significantly reduced inbound shipping costs.
Suppliers can account for a sizeable margin of error or fluctuations in purchase order quantities. If your suppliers choose the carriers or shipping companies you may be tricked in to paying a higher fee.
In such cases product and shipping costs are combined skewing the actual freight costs by SKU. To get an accurate price, unbundle freight from the product price. Talk directly to vendor’s account representative and keep the conversation two-way.
Allocate Proper Resources
Inbound logistics require you to dedicate a lot of time and resources that function according to your corporate goals and strategies.
Improper inbound management can take a toll on your profit margins and future logistics budget. In most organizations management needs to drive change by seizing control over inbound logistics processes, relationship with carriers and transportation equipment.
According to a B2B sector research, depending on the industry and company size, businesses can save up to 40% of their annual freight budget in inbound shipping costs.
Remove Department Silos
Companies that operate in inter-departmental silos can face major setbacks in the success of their supply chain. This is not merely a flaw in collaborative efforts but a company-wide problem which has drastic effects on inbound shipping costs.
In most organizations, inbound products are purchased by the procurement department. This department controls when and how goods are shipped, with no input from logistics department. Barriers like these boost inbound product costs and result in major savings being lost.
To use opportunities like truck space maximization, dock congestion prevention and adequate resources allocation, let all concerned departments be in charge of cargo.
Likewise, collaborating with suppliers directly handling shipping is another major cost-cutting strategy. Don’t be hesitant in requesting suppliers to have a share in the control over inbound shipments. Reputable suppliers will recognize the value in a partnership to reduce freight costs.
Gain Data Visibility
It’s essential for companies to acquire visibility to properly manage their inbound programs. All this begins with logistics-related data. There might be a large amount to sift through, organize and analyze. However, it is key in revealing precisely how your supply chain is performing.
It also opens opportunities to cut costs in redundant logistics processes. The biggest challenge in gaining visibility is learning how to implement the knowledge gleaned from the data analysis.
A clever inbound strategy will increase the effectiveness of your existing inbound shipping program and will provide insight into areas of improvement.
Managing an efficient inbound shipping program is essential for companies to cut inbound costs. Cargo Shipping International (CSI) ensures that together with its wide network of shipping lines and agents you get the ultimate shipping experience.
Email us at firstname.lastname@example.org to learn more about us today.