Transport is a top-five cost of doing business for many companies, and often higher, with efficient parcel delivery also a vital component of customer service. Here, logisitics expert Walter Scremin explains how you can cut your delivery costs.
The difference between transport either putting your business under pressure or helping it run smoothly for the year ahead comes down to a few simple questions. So how does your business answer the following five key questions for 2013?
1. Do we actually know what it costs to run a single vehicle?
Many businesses cannot answer this question honestly, and to be fair there is no simple answer. Running a fleet of vehicles, no matter how small, is rife with hidden costs, which is one of the strongest arguments for outsourcing to transport specialists where the costs are tallied on an hourly or daily basis. Getting to the bottom of the cost equation requires some patience and a good cost analysis tool. Only then can you make an informed decision on what this is all costing you.
2. How much management time is being wasted on parcel delivery?
Management often waste valuable time fighting logistical spot-fires when they could be working on other, more profitable core business issues. Communication is often the big reason and business can relieve this pressure by engaging a good, usable GPS tracking system. That way everyone is on top of what is happening with the deliveries that day, cutting down wasted time.
3. Can we cope with driver absenteeism and turnover?
Finding and keeping good drivers is a huge issue due to the costs involved in hiring and the disruption to your service levels. For many businesses the loss of just one driver is hugely disruptive. This is a key reason why more companies outsource their transport, as it relieves the staffing issue and provides access to a larger pool of drivers so that absenteeism is more easily managed.
4. Are we in the sweet-spot in terms of capacity, or burning money?
For a business which owns its own fleet, finding the ‘sweet spot’ in terms of capacity is incredibly difficult – whether under or over capacity, it costs you. Being over-capacity and having surplus resources hurts two ways – not only is that vehicle not actively earning you money it is also an expense in terms of purchase/lease, insurance and so on. When under capacity businesses struggle to maintain service levels and often revert to costly alternatives such as couriers.
5. Do we have control?
Control over finances, resources, vehicles and business fluctuations is difficult to attain. You may own your transport, but do you have the flexibility to respond? Outsourcing is becoming a viable option for transport because it gives companies more control to increase/decrease resources, allocate vehicles and drivers, break down costs and generally run their parcel delivery more efficiently.
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