Strategies To Reduce Your Company’s Shipping Costs
Businesses often feel a constant strain on their budget due to the ever increasing cost of operating expenses. Daily expenses such as utilities, insurance, rent or loan payments, product or services and employee costs all continue to climb while businesses feel the pressure to remain competitive by refraining to raise their own prices.
Maintaining a healthy balance in expenditures means finding ways to cut these and other operating costs. Shipping costs are affected by skyrocketing fuel costs and accessorial charges that increase every year, which means that finding ways to reduce a company’s shipping expenses can make a serious impact on its bottom line.
Reducing Shipping Costs
The amount of money that businesses spend on shipping often gets overlooked when it comes to the daily management of operations, but knowing how much you are spending on shipping is crucial to your ability to make sure your business is receiving quality shipping services at prices you can afford.
Analyze Your Shipping Expenses
Conducting an analysis of your shipping expenses can include determining your expenses as a percentage of total sales. For instance, many average size businesses spend anywhere between 1.5% to 4% of their total sales on shipping costs. While this amount can vary depending on the size and scale of the business, its total sales volume, and the type of products that it ships and receives, any size business can implement new strategies for shipping that can directly affect their bottom line.
Consider Your Inbound Shipping
One of the most overlooked ways to reduces shipping costs is by paying attention to your company’s inbound shipping expenses. Vendors most likely receive volume discounts from carriers, but they may not be passing those discounts on to you. Control over your inbound shipment routes can give you better opportunities that can greatly reduce your costs.
Audit Your Shipping Invoices
Auditing all of your inbound and outbound shipping invoices will increase your chances of finding costly mistakes that otherwise your company may needlessly pay. Check the invoices to make sure any discounts are noted correctly, that you are billed only for the service that you requested, take note of extra service charges, and verify your product’s classification for freight shipments. Also make sure that you are not paying any double charges for your inbound vendors.
Using Correct Methods Of Shipping
Making sure that you are using the correct methods of shipping for your needs is also critically important in reducing your shipping expenses. International freight forwarding companies such as Limco Logistics Inc. can manage your shipping needs wether by land, sea or air, relieving your company’s burden. Freight forwarding companies can maximize your shipping methods for a lower cost higher quality service.
Strategizing to reduce your company’s shipping costs can greatly lower its expenses, keeping on top of what you spend, making sure you are billed correctly, and outsourcing your shipping needs can help your company reduce its overall costs.
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