Ways to keep costs under control
If you run a shipping or supply chain business, you’ll know it’s tough out there.
While online sales are up nearly 70% compared to pre-pandemic levels, there’s significant competition to match this demand.
Several companies grew their market share during the peak of online shopping, including EVRi, a rebrand of Hermes that became an accredited Amazon carrier in 2023.
But Tuffnells, Yodel, and Royal Mail were among those recording significant losses. And customer satisfaction in the sector is remarkably low as well.
If these major players are struggling, what chance do smaller companies have?
One advantage to being an independent business is the agility with which you can move, improve, and make changes to your business.
This article will look at how to leverage that advantage and make changes now that can improve your bottom line.
In particular, we’re examining ways to reduce your labour costs and streamline your operations. If you can keep things running smoothly without wasted time and effort, you can match the major names in the industry.
Hire quality employees with potential
While not the quickest fix, this is nevertheless an important one for the performance and future of your business. While talented and experienced professionals may command higher wages, they will operate more efficiently and with fewer errors.
That’s going to mean fewer returns, mistakes, and reimbursements. Tasks will also be carried out more quickly and effectively. The savings you make this way will often straight up pay for the salary increases.
You can even get to the point where you have these employees without having to stump up for inflated wages. If you can find individuals that are easy to train and upskill, you can turn them into efficient and effective employees at a lower cost, given the time and effort to train them.
Embrace automation to reduce manual efforts
There are multiple ways that automated solutions can help cut down the manual time taken in your business. Route optimisation and inventory management are two great examples.
Route optimisation finds the most efficient route for your vehicles to take to complete their deliveries, searching through all the possibilities and often combining real-time traffic data as well. Don’t allow your delivery costs to depend on the local road knowledge of your drivers.
Inventory management tracks what you have in stock and where every item is, as well as helping you determine how much you need of any given piece. This makes it easier to keep storage costs low and allow pickers to quickly find and pack the right item.
Use appropriately sized vehicles
There’s an obvious trade off here based on the size of the vehicles you use. But it may not be clear whether your decisions are paying off or not. Putting in the time to understand your fleet and how best to use it will be worth the effort in the long run.
Larger vehicles of course have greater capacity, and so are able to hold and deliver more times in one run. That also means they are typically more expensive to run and maintain, and they may have disadvantages on the roads as well.
If your vans spend as much time squeezing through tight gaps and turning around on narrow streets as they do actually making deliveries, that could be a source of significant wasted effort.
Small vehicles offer greater manoeuvrability and efficiency, but lack the same load capacity. Quick runs of small items can be effectively handled by cars, bikes, or even scooters! Having multiple options within your fleet ensures that you are ready to handle any task. Even alternatives like rail and sea can be worth exploring, depending on your market.
Schedule smarter to reduce overtime
Overtime is a killer when it comes to costs in many industries, and shipping and delivery businesses are no different. If your drivers are constantly clocking up extra hours beyond what they’re scheduled for, then your costs are going to increase accordingly.
Take the chance to review your rotas and see if there are shifts that are often running over and creating overtime situations. Do you need to extend the hours of the shift, add another one in, or schedule an extra driver on your busiest days?
With a smart scheduling solution like Findmyshift, it’s simple to change your rota and send the new version to employees in an instant. Try it today and take control of your shifts and your costs.