India's road network is the second-largest in the world only after USA having approximately 4.7 million kilometers of roads which has around 8 million transportation vehicles traveling on their path at any given point.
Road transportation accounts for about 6% of India’s GDP. Still, these industries such as are affected by various inefficient services such as, corruption, accidents and poor services. Also, the fact that, all the businesses run entirely on trust which most companies have a terrible record of keeping specially when it comes to providing new technological facilities like package tracking etc.
One of the major problems is maintaining the low cost while matching the needs of the market and the needs of both supplier and customer ends.
Hindrance in the current market
The retailer needs smaller shipments at regular and quick intervals and at the very same time the Pune transportation company demands the overall price paid to the logistics to be kept at the minimum amount possible.
This becomes particularly difficult for the mid-sized companies that lack various capabilities in comparison to their bigger competitive counterparts. Due to lack of investment and capital invested in the technological development of the business mid-sized companies have to often settle for lower cost options which in turn reduce productivity. Logistics Junction is the solution to make up for the shortfalls and lower the overall cost of transportation services in India.
5 Ways to transport at lower cost
There are certain ways to reduce the overall cost of the goods transportation in Pune while keeping the overall productivity at an optimum level.
Here are five ways to achieve that goal:
1. Consolidation of the loads with similar shipper to reduce overall logistics costs
One the most effective ways to achieve this goal is to consolidate the loads among the similar shipper. Most of the companies may lack large amount of freight volumes which occupy full capacity of the truck they hire. Hence most of the space is wasted and the hired truck is not fully used. This is one of the major disadvantages in such cases. To reduce this kind of damage, the Pune transportation company consolidates with the similar shipper based on the material they are transporting so that they are transported by the transporters in Pune with the care required for such materials. For example, shipments of glass related articles can be made only with the shipper who is transporting such delicate material so that they can take proper care of such material and transport them without the damage, otherwise, the other type of shipment will probably not suit them. The other parameter that comes into the picture is the route they are traveling on. Similar shipper needs to be on the same path of delivery. So as to make the collaboration profitable, otherwise, round trips or multiple drop points will only make the delivery late and cost the business in a negative aspect.
Alternatively, they can lend out the space of their trucks to other smaller sized transportation companies in Pune with similar shipping needs and same routes to be traveled upon.
When it comes to consolidation with competitors, this is applicable too. In such scenarios, similar shippers are competitors and it is good business to consolidate goods with them when it is profitable for both and loss for none. This is hence a Win-Win situation.
2. Integrate Data from Sales and Fulfilment Systems
The process of inspecting the data plays a vital role in the transportation scenario. Knowing and keeping a track of the available inventory against the current orders needs to be really precise so as to not incur any loss. There is no real process to deal with the subjective decision making this is one such dilemma that needs to be addressed sensitive way. One solution is better integration of sales and inventory data. While this could be a barrier for smaller transportation companies in Pune with limited systems resources, many larger or mid-scale transportation companies in Pune have the experience and resources to integrate data from multiple systems to facilitate decisions. When combined with the company’s unique knowledge of the retail customer, decisions can be made based on the customer priority, not a “first-in, first-out” model that risks disappointing key customers.
3. Cross-dock Freight
Cross docking is another option for small and mid-scaled companies in which they can move to more of a just-in-time inventory model. It has proven to be a better strategy. Effective cross-docking requires:
• Visibility to factory production and inbound freight
• High end systems to combine orders with inbound freight
• Top notch coordination with carriers
Smaller and mid scaled require the right resources and technology to facilitate this process.
4. Product packaging in Distribution Centre
Retailers don’t always want to sell products in the same fashion that the products leave the factory and as they receive them. Different markets have different requirements; they may require different quantities in a pack, or different fashion of products altogether. So, where does this customization happen? Many transport agencies in Pune ship products from the Distribution Centre to the outside third party packaging firms only to have the product returned to the same Distribution Centre in the form of the different packaging which was demanded. This, in turn, increases freight costs and causes the company to lose visibility of the product during the packaging process.
This can be eliminated altogether by making the packaging at the distribution center itself.
What will be the possible benefit of integrating distribution and packaging functions?
Around 15% of savings is based on reductions in freight costs in between the raw and packaged material that travels to and fro from the distribution center, the inventory itself and damage that may occur during this process which can be completely avoided.
5. Reduce Chargebacks
Large goods transport companies in Pune have dedicated departments that monitor chargebacks. But small and mid-sized companies don’t have the resources to give ample amount of insight on chargeback reduction, so they often accept chargebacks as a cost they incur for the sake of doing business. Thus, a deal with the third party logistics provider can be vital for them. Logistics transportation companies in Pune that ship for multiple manufacturers know the retailers’ requirements and can police outbound shipments to assure compliance. The information, from such third party logistics companies, can be valuable in accessing the data needed to assure the accuracy of the charge and support penalty challenges.
The bottom-line can be stated that to reduce logistics costs with a virtual logistics capability with the implementation of various ideas such as consolidation and product packaging at the distribution center itself. Many big companies such as Logistics Junction has already become a part of the established larger companies who use supply chain synergies to increase their cost advantage and enjoy a bigger profit. This industry consolidation makes it more difficult for small and mid-sized companies to compete in the markets, leaving them vulnerable. But partnering with the right logistics provider and implementation of certain tricks at their own levels can level the ground and provide a fair fight with the bigger companies, also giving them a feel of the big company logistics capabilities without the cost that comes along with it.