The transportation industry has been particularly affected by the economic downturn of the past couple of years and the rising price of gas, and this has led to a significant increase in the cost of logistics in every sector. To increase the likelihood that your business will survive and get back on the track to growth, you need to ensure you are doing everything you can to minimize these costs – but this is not always easy to do. If you need or want to reduce your company’s transportation costs and are not sure where to begin, read on for some helpful hints and tips.
Make a budget
Before you can reduce costs, you need to know exactly where you are starting from before putting a clear strategy in place to help you streamline your operation. This applies both to businesses that have been trading for years and start-ups that are just getting to grips with transportation. This might include forecasting volumes and lanes or looking back over previous years to identify where you might be able to cut costs going forward.
Manage your drivers’ performances
You could have the best strategy, vehicles and technology in the world, but if your driving staff are not following what is expected of them, they will not count for much. It is vital that your drivers are putting your plans into practice, which is why they will need careful training and performance management. You can install a GPS tracker into your vehicles to check that they are following the correct routes, and you can also monitor their speed so you can check if any are driving irresponsibly or wasting fuel. Identifying potentially dangerous drivers could also help you to avoid costly insurance claims against the company.
Transportation technology has moved on significantly in recent years, and while it might require some initial investment, over time technology could significantly reduce your transportation costs. For example, there are operation and transportation software programs which help businesses to minimize their costs, and technology that reduces aerodynamic drag to improve HGV mpg performance.
Optimize your routes
Hopefully, your drivers are not still using paper maps to plan their routes. This is a sure way to end up with drivers taking unnecessarily long routes or ending up stuck in traffic or on poorly maintained roads. The better the routes they take, the faster they will travel and the less fuel they will use. This can also minimize the cost of overtime and reduce wear and tear on the vehicles. Route-planning software will find the best option possible for the circumstances of the day, including weather conditions and any road closures.
Keep on top of vehicle maintenance
It is well known that a poorly maintained vehicle is not only more likely to develop faults and break down but will also be more expensive to run. A broken-down vehicle needs to be towed and repaired, and then you face the potential losses of having a vehicle out of commission for a period of time. Make sure that you are carrying out regular preventative maintenance on your vehicles to avoid unexpected repair costs and unnecessarily high running costs.