Given today’s customer-centric environment and volatility of the current business climate, businesses have to rely on optimizing operational efficiency and smart logistics management practices. In fact, they should be among the top priorities when structuring out a profitable company budget.
If freight is a large part of your logistics services business, your company possibly faces rising rates across all your transport services. In addition to the regular increase in fuel and machinery prices, businesses face additional budget pressures from several different directions.
It is important to understand various strategies to minimize logistical expenses ranging from revising smarter shipping networks to streamlining inventory levels, and so forth. Whether you transport goods in high volumes or occasi0nally, internationally or locally, logistics services can contribute a large percentage of expenses.
Here’s a list of the things that majorly affect logistics costs
· Fuel cost
· Delivery delays
· Warehousing expenses
· Complex regulations governing trade (compliance checks, document processing etc.)
A key factor in reducing logistics costs is understanding and accepting digitalization. Digital logistics services ensure that there is end-to-end visibility, customer satisfaction, operational efficiency and also differentiate your business from the competitors.
In this article, we’ll discuss different digital methods and tips to reduce your logistics services costs and grow your business.
1. AI for Demand Forecasting
Implementing Artificial Intelligence (AI) to drive demand forecasting and taking action based on these advanced technologies can help to cut costs across the supply chain. Unlike traditional methods that rely on simple rules to produce a forecast, AI is able to go deeper and accurately anticipate demand forecasting. Al can learn rules, identify patterns in demand from the data and analyze any number of factors that might impact forecasting.
As a result, AI-driven demand forecasting can enable you to streamline tasks and minimize the risk of being left with unsellable stock. Al forecasting can lead to host of improvements, such as:
· Improved ability to negotiate with suppliers
· Optimized labor scheduling and rostering
· Improved transport planning
All in all, AI driven demand forecasting can not only result in more efficient processes but also help to significantly reduce logistics services costs all while maintaining customer satisfaction. However, to enjoy the full value of using AI in demand forecasting, you need to understand that AI empowers people and doesn’t replace them.
2. IoT for Warehouse Management
Unlike traditional warehouse management systems, IoT (Internet of Things) warehouse management solutions allow logistics services businesses to monitor goods down to the item level, and allow accurate planning capabilities, real-time reporting and statistics.
The IoT can help you lower risk, avoid accidents and mistakes that can create losses in the supply chain by early detection. For example, installing sensors in the warehouse can enable you to monitor moisture, temperature, and other conditions. Similarly, data coming from the products, vehicles and shipping can be combined to reduce spoilage, theft, diversion, and counterfeiting.
Whether manual or automated, an IoT management system synchronizes all your data in an easy-to-access network, enabling you to optimize your inventory control and reduce your logistics costs.
3. Carrier Selection
When done manually, carrier selection is a time-consuming process entailing complex calculations. Specialized technology enables organizations to easily choose the best carrier for every type of shipment in real time based on service level and cost. Offering customers an extensive range of delivery options through technological solutions can aid in quicker and a fairer decision making. Likewise, it allows logistics services businesses to track their carriers, along with affiliated information, like carrier availability, fees, saving opportunities and much more. Online logistics services also help logistics managers and decision makers to better balance services which in turn help reduce the process time and logistics services costs.
4. Digitalization of Documentation
Traditionally, logistics services run on paperwork, which is very time-taking. Digitalization of documentation not only cuts down the intensive paperwork process but also the number of errors, staff and time commitment. Moreover, the paperless solution conveniently helps you reduce courier fees, bank fees and staff fees. All this, without any change to day-to-day business operations. The digitalization of documents is undoubtedly one of the simplest methods to reduce logistics services cost.
5. Real-time Shipping Updates
Real-time data is an asset for logistics services businesses. Analyzing data in real-time gives you insights of what is happening during last-mile delivery. It helps you take necessary steps to avoid or eliminate delivery inefficiencies such as idle time, number of tasks covered, successful vs failed deliveries, average time per delivery, traffic, missed deliveries, delayed deliveries, repeat deliveries and so forth.
Analyzing and anticipating trends based on real-time data can improve efficiency and reduce your logistics services costs considerably.
6. Autonomous and Connected Delivery Vehicles
Autonomous delivery vehicles integrate different technologies to enable deliveries without having a human driver on board. There are numerous benefits of autonomous delivery vehicles like reduced travel time and increase in productivity, better last-mile services, improved fuel economy, reduction in the number of accidents, lower cost, better maintenance maintenance and so on. All in all, integrating autonomous delivery models in your logistics business will help you to significantly lower your logistics costs. Similarly, on-board driver drowsiness detection technology, GPS tracker and fuel sensors are some of the new ways to efficiently manage logistics costs in the modern era.
7. Smart Containers
Smart containers are shipping containers used in logistics services and freight that provide end-to-end visibility and traceability of items. These containers enhance security, provide real-time GPS tracking and accurate condition, location and environment information that can alert operators to any potential issues with the shipment. The information collected is automatically put into digital records, which can be shared with the customers for real-time tracking of the shipment. Overall, smart containers provide error-free and efficient operations resulting in reduction of logistics services costs.
Technology has enabled better management and control of logistics costs without disrupting business operations. Logistics services businesses should expect more customers to book deliveries online rather than visit in person. The online transport and networking community like Vahak enables Indian logistics businesses to connect with transporters, truck owners, and brokers across the country through its platform. Vahak combines powerful technology to offer seamless booking of trucks and loads online.
Now that you have a better understanding of how to reduce the logistics costs through digitalization, download the Vahak transport app to access the best logistics services online!