Six ways to reduce transportation costs in logistics

Due to staff shortages, economic challenges, the pandemic and a countdown to net zero, the logistics industry is facing a period of unprecedented change. Although resilience endures across the board, our latest Industry Monitor report shows fuel costs are a leading cause of concern to 43% of industry leaders right now, along with rising operational costs.

If, like operators industrywide, you are looking for ways to cut expenses, reduce fuel costs and maintain stability, here are five tips to get started:

Tips to reduce transportation logistics costs


1. Embrace automation

An optimised workflow is essential to compete in today’s digitised landscape. In addition to increasing productivity and reducing costs, logistics automation can also help identify and fix areas in the supply chain that aren’t working as efficiently as required.

2. Preventative vehicle maintenance

Emergency or breakdown maintenance is an essential backup, but one of the best ways to reduce logistics costs on transportation is to ensure regular vehicle maintenance. A breakdown can cost hundreds of pounds per day and can be avoided by regularly ensuring vehicles and machinery are in good working order. Asset Alliance offers a fleet management solution that includes six weekly inspections to ensure consistent maintenance.

3. Work with suppliers

One strategic way to reduce costs is by working with and building stronger relationships with suppliers, who may be able to absorb some of the logistics costs or provide essential planning insights. Some operators are reducing costs by joining consortiums and purchasing bulk supplies at lower prices, particularly on fuel.

4. Improve your route planning

Time spent in traffic or travelling longer than planned distances can increase fuel costs and overall expenses. One of the most crucial ways to save money is to plan well-optimised routes that factor in traffic, weather conditions, distance, load capacity and even areas to avoid. A route planner can eliminate risks, while vehicle trackers can help ensure drivers maintain the correct speed on chosen routes. 

5. Make decisions based on data

Informed decision-making is vital to identify areas where extra costs are incurred, or processes aren’t as streamlined as needed. Using a warehouse management or transportation management system, you can access the data and trends needed to make decisions that will improve operations and reduce costs.

6. Upgrade your fleet

Upgrading to newer, fuel-efficient models is a big change that will end up saving you a significant amount in the long term. By replacing vehicles as they age past their useful life with newer, more efficient vehicles, you can upgrade your fleet, reduce fuel spend and have less impact on the environment. Find out how to make the best choice for your business.

Find out how Asset Alliance can save you time and money on new and used vehicles. Get in touch.