From the perspective of a consumer, the movement of goods from one location to another may seem like a simple process that requires little planning. But in fact, there are many moving parts that need to be accounted for and managed in order to prevent any issues from arising and to ensure that the movement of goods is as quick, simple and cheap as possible.
Logistics is the process of planning and implementing the transportation of items. Whether it’s taking place on a local, regional, national or international level, it’s vitally important that this process is suitably formulated and put into action in the most effective way possible. In this blog, we explain what exactly transportation logistics management is, the various considerations there are in terms of cost and how logistics service providers can look to reduce the costs of the services they provide.
What is logistics and transport management?
Transportation logistics management plays a crucial role in getting goods from their source to their designated destination. It is a vital part of supply chain management, and without it, the movement of goods would be inefficient, potentially leading to significant delays to delivery or even a complete breakdown in the transport process.
Another concern that could arise if transportation logistics isn’t managed properly is the effect it could have on the overall cost. Simply put, it is incumbent on logistics service providers to keep transport costs to a minimum.
How to calculate the transportation cost in logistics
As there is an extensive list of considerations and processes that go into transportation logistics, it’s to be expected that a vast number of different costs will arise. It’s important for logistics companies to keep costs low in order to attract business and at the same time make a profit. However, certain expenses are unavoidable and simply part of moving goods from A to B.
The main costs involved in transport typically include packing and shipping expenses, as well as storage and handling costs. The amount businesses need to pay for these services will vary depending on a wide range of factors, including what they need to transport, the quantities involved, the mode of transport and the distances involved.
How to reduce logistics cost on transportation
When a logistics service provider is spending too much money on the transportation of goods, it’s important that they identify any unnecessary spending and implement cost effective alternatives. They may look at:
- Consolidating shipments
- Using different modes of transport
- Preventing any loss or damage to goods by hiring a warehouse as a hub for temporarily storing shipments
- Investing in specialised software to monitor areas to improve
- Proposing a partnership with another logistics service provider.
With any process as extensive and subject to variables as transportation logistics, it can be difficult to identify and remove unwanted additional costs, but with some methodical analysis, it may be possible to reduce the expenses involved.