How To Reduce Your Inbound Shipping Costs?
There’s no such thing as free shipping.
Inbound shipping costs refer to incoming freight transport, storage, and delivery of goods cost borne by a company. It is essentially the cost of shipping goods from your production site to their final destination.
A cost-efficient and effectively controlled inbound chain result from several efforts. These include determining CPU, allocating company resources, inter-departmental collaboration, and more.
This post will discuss how businesses can use these strategies to reduce their inbound shipping costs successfully.
Determine Cost Per Unit (CPU)
Although breaking down your freight expenses into costs per unit might be challenging, 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, they may trick you into paying a higher fee.
In such cases, product and shipping costs are combined, SKU skewing the actual freight costs. To get an accurate price, unbundle freight from the product price. Talk directly to the vendor’s account representative and keep the conversation two-way.
Allocate Proper Resources
Inbound logistics require you to dedicate 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, relationships with carriers, and transportation equipment.
According to a B2B sector research, businesses can save up to 40% of their annual freight budget in inbound shipping costs depending on the industry and company size.
Remove Department Silos
Companies that operate in inter-departmental silos can face significant setbacks in the success of their supply chain. This is not merely a flaw in collaborative efforts but a company-wide problem that drastically affects 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 the logistics department. Barriers like these boost inbound product costs and lose significant savings.
To use opportunities like truck space maximization, dock congestion prevention, and adequate resource allocation, let all concerned departments charge cargo.
Likewise, collaborating with suppliers directly handling shipping is another primary cost-cutting strategy. Don’t hesitate to request 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
Companies need to acquire visibility to manage their inbound programs properly. All this begins with logistics-related data. There might be a considerable amount to sift through, organize, and analyze. However, it is vital to reveal 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 vast network of shipping lines and agents, you get the ultimate shipping experience.
We are an international freight forwarding company based in Rotterdam. Our cargo and freight services include Ro-Ro shipments, air and ocean freight, container shipment, and more.
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