Costly Mistakes Your Business Logistics Could be Making
What are some of the major problems in logistics and how can you avoid them? You likely face everything from rising transportation costs to labor shortages. No matter the location of your business or how established you are, there are some costly mistakes you may be making that can cost your business major revenue every year.
According to Statista, the United States is one of the leading logistics markets with a revenue of $791.7 billion per year. Logistics businesses control the storage and transportation of goods and materials throughout the country to shipping centers or retailers.
Demand is currently high in this industry, so it’s easy to work without taking time to focus on areas where you might improve. Due to the rapid pace, it’s easy to overlook some costly mistakes. Here are the most common ones and how you can fix them today!
Either you hire independent contractors or have a fleet of trucks and drivers. With one solution, you must also offer benefits and have vehicle maintenance. With the other, you risk someone else hiring your contractors out from under you, particularly during the current labor shortage.
How do you ensure you can get your clients’ items from Point A to Point B efficiently while still controlling costs?
Start by assessing where you’re spending money. Do a full audit. Are you wasting time and finances on costly repairs? Adding some sensors to your fleet or doing more frequent maintenance may save money in the long run.
Can you get a break on insurance and other benefits by negotiating with your insurance company? It never hurts to try. Reanalyze every year or two for the best rates possible.
If your company also stores and packs orders, you may be able to automate the process with some equipment and become much more efficient. Pay careful attention to the return on investment versus the cost of the machines. Most companies doing significant volume find they can better utilize their human workers and the automation more than pays for itself.
Improve your reputation as the number one logistics provider in your area by speeding up the results through automation. You’ll gain customers once your reputation precedes itself. Don’t be hesitant to embrace new technologies if they improve the process.
One of the highest costs for a logistics company can be the transportation fees. If you keep a fleet of vehicles, you must insure, maintain and replace them frequently.
You also have little control over the varied costs of fuel and tolls. Allot more than you need into your formulas so you recapwhat you spend from your customers.
It’s vital you stay on top of current trends so you can align yourself with them and take advantage of new opportunities. For example, experts found around 13% of consumers prefer to buy direct from brands with a projected increase of 14% in the next year. Online ordering is the wave of the future and if you aren’t set up to help businesses deliver these one-off orders, you may be missing out on a huge potential audience.
The country is also in a supply chain blockade crisis at the moment. Understanding the challenges faced by your clients in trying to get goods from the ports into the country means you can help them navigate the problems and plan for them more effectively. If your clients are successful, you’ll remain successful.
What are your competitors up to? Pay attention to any new services they offer or trends within their companies. You can learn a lot by what they do – both positive changes and mistakes. Adopt the strategies that seem smart and make sure you aren’t repeating their poor ones.
Your current customers are your bread and butter. You may have people who’ve been with you for many years. If you take them for granted and don’t give them the proper attention, a competitor may woo them away.
Make sure you touch base with your top clients regularly. Ask them how their experience has been and if they have any suggestions for changes. Find out what needs they have that you might not be meeting. You may gain new insight into services you should add.
The more open you are to constructive criticism, the better your logistics business will fare. Ask your employees, truck drivers, suppliers and customers what you can do to improve the process. Constantly analyze your business and make improvements along the way.
Some things may work out and some might not. You can always turn the clock back and go back to old processes. However, you’ll never find a better way of doing things if you don’t at least try.
Authored by Eleanor Hecks
Eleanor Hecks is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philly with her husband and pup, Bear.