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Reduce Your Shipping Freight Delivery Costs

Many businesses are paying more than they need to for their shipping and delivery operations. With a few simple steps, a business can significantly reduce expenses, and often improve customer service at the same time.

1. Eliminate that "extra" company vehicle.

"But I don't have an extra company vehicle". All businesses that have company owned delivery vehicles have at least one "extra" unit, if not more. If you own three, the chances are that you need only two. If you only have one, you likely have one more than you need.

The fact is that is near impossible to maximize productivity on 100% of your fleet while still maintaining a high level of service to your customer. If all of your vehicles are busy all of the time, then somewhere there is a customer waiting longer than they would like. As this scenario is unacceptable to most businesses, it is common for a business to own more delivery resources than it can utilize to 100% capacity. The overall excess resources go far beyond the vehicle and include all associated expenses:
What does that company vehicle really cost?
actual cost of company vehicle
  • Maintenance
  • Insurance
  • Fuel
  • lease or interest expense
  • Paint / Lettering
  • Employee wages
  • Benefits
  • Payroll Taxes
  • Employee tools and
    other equipment
  • Increased management
    time/cost per unit
Intangibles
  • Risk / Liability
  • Aggravation (e.g. breakdowns)
  • Employee Absence
  • Employee downtime
    (inconsistent workflow results in periods of wasted resource)
* Although fuel is a considerable factor in the overall picture, unlike the other costs, which are fixed, your fuel expense will of course vary in direct relation to the vehicle's use, or lack thereof.

In the above example, all of your expenses are fixed, with the exception of fuel, and to some extent, maintenance. The rest of the costs are there every month regardless of whether you keep that vehicle busy 100%, 70%, or even 0% of the time. Again, in the case that your fleet utilization is at or near 100%, the chances are that customers may not be receiving the best service times. In the next section we will compare various cost scenarios of keeping excess in-house delivery resources versus outsourcing a larger percentage of your shipping operations.


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2. Replace high fixed costs with a flexible variable expense.

- The in-house vs. outsource dilemma. Continue >>



3. Reduce courier expenses.

- Using the right courier for the job. Continue >>



4. Get shipping discounts.

- Take advantage of available courier discounts. Continue >>



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