The cost of moving goods is going up. Rising fuel costs, global supply chain pressures and a broader increase in the cost of living have delivered a significant blow to logistics businesses.
In a recent survey, 71% of UK logistics companies reported a hike in the cost of transporting goods during the first quarter of 2022 when compared to the first quarter of 2021. 40% of respondents said that costs had exploded by 25% or more.
These challenges have forced logistics companies to raise their rates, while customers decrease their orders.
As the logistics industry is usually a good indicator of the health of the wider economy, the signs are worrying in light of recent global events. But this is the natural rise and fall of economies and, at times like these, it’s essential for logistics companies to find ways to reduce costs and optimise their processes to fortify themselves against additional supply chain turmoil and further spikes in freight rates.
A cost-effective supply chain
Ensuring the cost-effectiveness of your supply chain is vital in surviving an unpredictable economic environment. This involves getting a high-level view of your spending across all of your processes and determining what you can optimise to reduce cost.
Inventory is a key place to start, as moving and storing inventory requires considerable time and money, higher than what is commonly assumed. To optimise your supply chain inventory, make forecasting and demand planning a part of your greater strategy.
Digitising your network can also drastically increase cost-effectiveness. When you digitise, you connect your disparate systems and create a single, centralised source for your data. This ensures quick, accurate and efficient communication across your organisation, vital in fluctuating circumstances.
It allows you to have the latest information always at hand, ensuring that in a moment’s notice you can make corrections and adjustments across your whole supply chain.
If your supply chain challenges seem difficult to solve on your own, consider outsourcing your fulfilment processes to a reliable 3PL.
It’s a cost-effective solution that takes the worry out of the equation by letting experts navigate the complexities of the current logistics climate for you, enabling you to concentrate on running your business.
A core benefit of engaging a 3PL is that you immediately gain access to their supplier network–in the event that one supplier falters, the company can draw from their vast resources and transfer the work to another contact.
Another benefit is the savings realised in the cost of warehouse space and staff and delivery vehicles, as these are all provided by the 3PL. This can lead to a healthier bottom line, helping to alleviate the pain of the squeezed margins afflicting companies in today’s volatile environment.
A third advantage of employing a 3PL is that logistics requirements will automatically scale. This means you don’t have to concern yourself with monitoring inventory levels, finding ways to decrease travel times for goods or staffing your warehouses to the appropriate levels. This is all done for you, eliminating unnecessary stress.
If outsourcing seems right for you, only consider experts with a global reputation.
Teaming up with Sprint Logistics
As escalating fuel costs, supply chain turmoil, and an increase in the cost of living pose serious concerns to logistics businesses, reducing operating costs and optimising processes are essential objectives in order to survive today’s uncertain economic climate.
As an established global expert in end-to-end supply chain processes, Sprint Logistics offers cost-effective logistics solutions to a broad range of businesses and their customers. We reduce cycle times and costs, provide distribution, fulfilment, warehousing services and much more, taking the complexity out of navigating today’s challenges.
Contact us today to discuss how we can support your business.