Minimizing costs of any kind is the key to survive and being competitive on the market. Among all kinds of costs, logistical costs remain the hard bone.
๐ญ.๐ช๐ต๐ฎ๐ ๐ถ๐ โ๐น๐ผ๐ด๐ถ๐๐๐ถ๐ฐ๐ ๐ฐ๐ผ๐๐๐?โ
Logistics costs refer to the expenses incurred in the process of planning, implementing, and controlling the flow of goods and services from the point of origin to the point of consumption. These costs encompass various activities including transportation, inventory management, warehousing, packaging, and information management.
There are ๐๐ฒ๐๐ฒ๐ฟ๐ฎ๐น ๐๐๐ฝ๐ฒ๐ of logistics costs:
๐ง๐ฟ๐ฎ๐ป๐๐ฝ๐ผ๐ฟ๐๐ฎ๐๐ถ๐ผ๐ป ๐๐ผ๐๐๐: These include expenses related to moving goods from one location to another, such as fuel, vehicle maintenance, driver wages, tolls, and freight charges. Transportation costs can vary depending on the mode of transport used (e.g., truck, rail, air, ocean) and the distance traveled.
๐๐ป๐๐ฒ๐ป๐๐ผ๐ฟ๐ ๐๐ผ๐๐๐: Inventory costs encompass expenses associated with storing and managing inventory, such as warehouse rent, utilities, insurance, taxes, depreciation, obsolescence, and shrinkage.
๐ช๐ฎ๐ฟ๐ฒ๐ต๐ผ๐๐๐ถ๐ป๐ด ๐๐ผ๐๐๐: Warehousing costs involve the expenses of operating and maintaining warehouse facilities, including labor, equipment, security, materials handling, and facility management.
๐ฃ๐ฎ๐ฐ๐ธ๐ฎ๐ด๐ถ๐ป๐ด ๐๐ผ๐๐๐: Packaging costs refer to the expenses associated with packaging materials and processes, including the purchase of packaging materials (e.g., boxes, pallets, wrapping), packaging design, labeling, and handling.
๐ข๐ฟ๐ฑ๐ฒ๐ฟ ๐ฃ๐ฟ๐ผ๐ฐ๐ฒ๐๐๐ถ๐ป๐ด ๐๐ผ๐๐๐: Order processing costs include the expenses incurred in processing and fulfilling customer orders, such as order entry, picking, packing, and shipping.
๐๐ป๐ณ๐ผ๐ฟ๐บ๐ฎ๐๐ถ๐ผ๐ป ๐ ๐ฎ๐ป๐ฎ๐ด๐ฒ๐บ๐ฒ๐ป๐ ๐๐ผ๐๐๐: Information management costs pertain to the expenses associated with managing and processing data and information related to logistics operations, such as software systems, data storage, communication networks, and IT infrastructure.
๐ฎ.๐ช๐ถ๐๐ต ๐๐-๐ฟ๐ฒ๐น๐ฎ๐๐ฒ๐ฑ ๐๐ฒ๐ฐ๐ต๐ป๐ผ๐น๐ผ๐ด๐ ๐ณ๐น๐ผ๐๐ฟ๐ถ๐๐ต๐ถ๐ป๐ด ๐ถ๐ป ๐ฎ๐ฌ๐ฎ๐ฐ, ๐๐ต๐ฎ๐ ๐ฐ๐ต๐ฎ๐ป๐ด๐ฒ๐ ๐ต๐ฎ๐๐ฒ ๐ต๐ฎ๐ฝ๐ฝ๐ฒ๐ป๐ฒ๐ฑ ๐๐ต๐ฒ๐ป ๐ฐ๐ผ๐ป๐๐ถ๐ฑ๐ฒ๐ฟ๐ถ๐ป๐ด ๐ฟ๐ฒ๐ฑ๐๐ฐ๐ถ๐ป๐ด ๐น๐ผ๐ด๐ถ๐๐๐ถ๐ฐ๐ ๐ฐ๐ผ๐๐๐?
Entering 2024, with AI-related technologies flourishing at an unprecedented speed, there are several new trends in the logistics field, which may give us new inspirations on reducing logistics costs.
According to Brian Straight, โSupply chain professionals are gaining attention in 2024, with a focus on cost management. A Boston Consulting Group survey found that 65% of executives prioritize supply chain and manufacturing costs for cost savings, surpassing traditional areas like labor and nonlabor overhead costs.โ
https://www.scmr.com/article/supply-chains-pressures-companies-seek-cost-savings
For companies that are looking to sustain cost savings, Boston Consulting Group said that quick wins can โunlock resourcesโ that can be reinvested in areas that will drive growth, including modernizing the supply chain, AI, and talent advancement.
Based on Kinga Edwardsโs predicative insights about logistics trends in 2024, โA persistent global labor shortage in the logistics industry is driving the adoption of new technologies. From computerized warehousing processes to experimental autonomous trucking, businesses are optimizing their resources to combat a shortage of workers.โ โLogistics companies are integrating end-to-end automation to streamline their processes, save time, and reduce errors โ for example, in data collection and management.โ
https://ecommercegermany.com/blog/top-insights-about-logistics-trends-in-2024
In a word, the shortage in labor and the rapid development of technology both drive the automation of supply chain and logistics.
Furthermore, maritime uncertainties such as red sea crisis and panama canal restrictions all add the complexity of reducing logistics costs. Therefore, leveraging controllable logistics management and realizing automation of the whole process are essential for companies in the new year.
LoadMaster load planning optimization software can help a lot in your automation process. With its help you donโt need the labor to handle loading calculations and planning, so much time saved. And also the software-calculated 3d load plan can realize higher space utilization rate, which means more containers/trucks/trailers can be saved, leading to lower shipping costs. According to LoadMasterโs clientsโ feedback, it can help improve the space utilization rate by 10% on average and shorten the calculating and loading time by 90%. Plus LoadMaster is welcome to be integrated with any standard system such as ERP, WMS, TMS, achieving the automation of the whole order shipping process.
You can only know if a product suits you after you try it out. LoadMaster provides each company with a 30-day free trial with full functions. And during the trial, customer services including stacking requirements sorting and remote live demo are all free. Welcome to try!