Freight management is a strategic system, which allows businesses to effectively manage their commercial transport costs. There are many ways of optimizing this cost. One way could be matching all associated transportation costs to bring down the overall money spend and the other is availing professional freight management services that collaboratively match the transportation needs of various companies to let them enjoy benefits of large scale economies.
As far as the first solution is concerned, companies would know that freight costs not only include direct shipping/transport costs, but also costs that are incurred on storing inventory, salaries of staff managing the inventory, packaging material, and other miscellaneous costs. Smaller firms can handle the issue on their, while it can get complicated for larger firms to manage all these variables simultaneously.
The better option for all these larger firms is to hire professional freight management consultants. They are neutral to the internal environment of the company and have a vast experience in managing shipping needs of various clients all at once. This gives them the expertise to compute the right equations for all freight variables and extract optimized solutions.
Since there are two main modes of freight transport, one is shipping material and the other is truck transport. For long distances shipping always proves more economical, but when it comes to local transport, and delivering goods within a specific region or area, trucks become indispensable. When effectively implemented, a freight management system can help divide the transport load between the two in a manner that minimizes all costs.
Again here, availing professional services from freight management service providers in Australia can prove beneficial. They will manage two core areas of freight, routing and scheduling. This means that no trucks would make return trips empty. They would carry your goods one side, and bring back some other company’s goods, which would mean you end up paying only for one side transport. This is mostly applicable for regional trips.
In addition to all this, freight management service providers also offer to manage your inventory stock, which is an important element in determining freight costs. They study and analyze your company’s inventory trends and help you deal with the problems of under-stocking and over-stocking. While under-stocking could mean you will have to hire urgent transport, which could be expensive owing to many reasons, and over-stoking could mean extra storage costs, which would add up to the final shipping and freight charges.
An imbalanced stock also affects the way companies deal with their retailers and wholesalers. If retailers fail to get their orders from the suppliers in time due to low inventory levels, they might switch to some other supplier. And if on the other hand, the company has over stocked material, it will only add to the holding costs, and ultimately reflect in prices offered to retailers, who may then shift to other vendors offering more competitive prices.
So, we see that the above account presents that there exists a very thin line between freight management and controlling inventory. So for keeping the profitability of a company on the higher side, implementation of proper freight management services becomes indispensible.