If you can reduce the freight on shipping in and shipping out of the warehouse you will increase sales profits. So how do you accomplish such a time-sensitive and important strategy, or simply improve what you have in place? The following stratagems will prove helpful in reducing shipping expenses:
When you reduce your vendor base you will significantly reduce your transit cost, and at the same time simplify the way you handle the company’s payables. A huge cost driver for warehouse management and inventory management is handling multiple shipments from various vendors at the same time. Your best bet uses vendor consolidation so bigger product volumes are shipped directly from only one warehouse location and just a single vendor.
Watch Your Packaging.
Correct packaging is crucial in protecting products from damage. Make sure you have large, sturdy pallets available for your heavier product shipments. Don’t skimp on your belts and ties when securing product volume; always use industrial-strength. Otherwise, you risk product spills that are costly and time-consuming to clean up.
A Fishbowl expert will tell you up front that the best way to reduce any warehouse-to-warehouse shipping expense is to use the FTL (full-truck load) system. LTL (less-than truck loads) are not as efficient in the long run, although you may be tempted to go that way because of time constraints. You’ll have to balance your bottom line with customer satisfaction; if one or two days won’t make that much of a difference to most of your customers, then by all means go FTL. If you don’t own your own shipping vehicles, consider how such an investment will free you up to schedule deliveries when it is most cost-effective for you, and not most convenient for the trucking company you’re using.
Play All The Angles.
How much does your company lose each year by careless shopping and inept bargaining with freight companies? Always keep your options open and compare INCO terms and costs, as well as the benefits and disadvantages of different routes. Don’t expect your shipping companies to automatically offer you the best possible fees and routes. Take the initiative and look for them yourself (or delegate this important job to someone in your warehouse).
Combine Your Shipments.
Not the same thing as shipment consolidation. To combine shipments means to meld your own product shipments with those from other warehouses in your neighborhood that are not affiliated with you.
Your Fishbowl consultant can help you find aps and online resources that help you combine volumes with other local companies so each truck is filled to the max before it leaves. This only makes sense, not only for you but for the trucking company – the more they can ship in a single truck the better their profit margin becomes. Once again, however, time constraints may make this impractical – when the product needs to be there yesterday. But when the product to be shipped is not under a ticking clock, do all you can to work with other companies to make sure each truck that goes down the highway is loaded to the gunwales.
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Always keep in mind that your goal in warehouse management and inventory control is to produce as many FTL shipments as you can – this will always have a positive impact on your bottom line.