Proper Planning Can Minimize Transportation Costs
Rising fuel costs combined with consumers’ increasing demand for faster delivery options at little (or no) cost are forcing supply chain managers to run leaner, more cost-effective operations. Ensuring transportation costs are kept under control by making the most efficient use of vehicles, fuel, and drivers is a high priority. At Taylored Services, we are supply chain and order fulfillment experts, and we wanted to offer these 9 route planning tips to help you keep your transportation costs in check.
- Automate route planning. Routing and scheduling software can analyze all the real-world constraints your distribution operation faces every day to help you plan the most efficient routes for your vehicles.
- Implement live vehicle tracking. Live vehicle tracking enables you to compare planned routes against actual routes your drivers are taking. You’ll be able to see if there are any unplanned activities such as drivers taking detours, longer-than-expected delays, or stops at customer sites. Vehicle tracking can also help identify areas of slack in your planning setup that will improve productivity.
- Model what-if scenarios. Modeling gives you the opportunity to see the consequences of making changes to your transportation system without making the investment of time or money. For example, you can test what happens to transportation costs when you change variables like vehicle size, drivers’ hours, delivery frequencies, and delivery locations.
- Evaluate route optimization settings. Customer demand, traffic patterns, levels of congestion, and delivery windows usually change over time. Fine-tuning your operation in real-time can help you make sure transportation costs are kept to a minimum.
- Time heavy deliveries strategically. As you know, the weight of a vehicle has a large impact on fuel consumption levels. Since heavier loads consume more fuel, they should be dropped off first. If they can’t go first, collect heavy items last so you are only paying for transporting them back to your depot.
- Implement fuel reduction strategies. Putting a strict speed limit in place on all company vehicles, reducing miles driven by empty trucks, and even ensuring your fleet’s tires are properly inflated at all times can go a long way in saving fuel and money.
- Integrate backhauls into delivery schedules. Combining collections and deliveries in the same vehicle can improve efficiencies and turnaround times. And you’ll reduce empty miles by preventing your drivers from needlessly returning to the depot.
- Use accurate product data. Make sure your product’s dimensions and volumetric data are up-to-date. This will help maximize vehicle fill and facilitate optimized routing and schedules.
- Benchmark and review progress. Make sure that you are collecting accurate operational data each day. You can use this data to benchmark the planning process, uncover areas for improvement, and detect trends.
If you’re in supply chain management or you’re a business owner, then transportation costs are inevitable. The tips above can help minimize your spend on transportation, and run a more efficient operation overall.
Taylored Fulfillment Services is a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Established in 1992 and headquartered in Iselin, New Jersey, we operate 1.5 million square feet of warehouse and distribution space strategically located near the nation’s busiest ports, including Los Angeles, Long Beach, and New York.