HOW CAN LOGISTICS COMPANIES REDUCE OPERATIONAL COSTS?

Nitin O Mahipal, Chief Executive Officer and Managing Director, Mega Pack & Carry writes about the logistics costs required to support goods suppliers.

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Logistics companies are the organisations that take care of the end-to-end movement. From the point of origin to the end for any products or services which reach your doorstep. The logistics services cover various areas of expenditure like transportation, packaging, handling, labour/driver management, related overheads, technology, and so on. The freight rates are decided by the logistics company before the operations are conducted by the carrier. Freight rates are generally an amount paid for the transportation of the bulk or a package of goods. The freight rates which ultimately have to be borne by the ultimate customer put budgetary pressure in many ways on the manufacturer of the goods. To stay competitive in the market, the logistics cost also needs to support the supplier of goods.

BARRIERS THAT LED TO RISING FUEL PRICES

For every part of the logistics operation, the companies need to cash out. Be it packaging, storing, weighing or transporting the goods, all the expenses have to be met to put your product on the shelf. The two great barriers from 2020 – the Covid-19 pandemic and then the emergence of war between Russia-Ukraine has led to sky-rocketing fuel prices. With the rising price of fuel, running the whole logistics operations by airways or roadways is costing the companies an arm and a leg. Now, every company’s biggest challenge is to tame the rising logistics cost, especially in large geographies like India.

Few things that will majorly help logistics companies reduce operational costs

TURNING TO ELECTRIC TRANSPORT