How to Reduce Labor Costs in Shipping Operations

It’s always the right time to think about how to make a supply chain more cost-efficient, and finding ways to reduce labor costs is an integral part of that equation. Developing partnerships through long-term contracts with carriers make all of the difference in service quality and cost-effectiveness. If a carrier expects to work with a shipper regularly, with a regularly anticipated volume, they can better prepare for that capacity. In short, loyalty matters, and consistency can have a beneficial effect on shipping rates as well.

Invest in meaningful relationships

Cultivating meaningful relationships also extends beyond carriers, to the entire workforce of shipping operations, as reducing turnover rates of employees will benefit the bottom line. It is always more expensive to fire and rehire than to invest in quality employees, and that investment can be made through incentivizing workers.

Other essential and often overlooked relationships to invest in are the relationships that exist between suppliers. Consolidation allows shippers to combine their deliveries with other nearby companies, and this can be an invaluable practice, especially when peak season volume is higher than expected. As more collaborative relationships form between shippers, providers, freight brokers, truck drivers, and third-party logistics providers, labor can be streamlined to benefit the supply chain overall. Combining shipments is not only cost-effective, but it can also ensure timely deliveries and fewer deliveries in a pinch.

Be More Prepared For Pickup

In addition to building solid relationships, there’s a lot more shippers can do to be more prepared for pickups. Preparation perhaps sounds like an oversimplified solution, but on the supply end of the delivery pickup, shippers can work to be more on time for pickups, more ready for pickups, and more prepared to offer flexible pickup windows, i.e., night pickups, when possible. Every convenience offered to workers will expedite the process of moving freight and reduce the labor needed for a job to be completed.

Consolidation of goods and well thought out packaging can also substantially lower the number of person-hours required to ship capacity. Suppliers can combine multiple shipments into one load and consider reducing box sizes as a way to reduce labor needs. Maximizing storage space with boxes helps to create an efficient loading process that ultimately reduces the labor required to move freight. This can be done by combining packing and shipping stations and streamlining label configurations with the use of a multi-carrier shipping system.

Using appropriate packaging to adjust to dimensional ratings is also crucial in reducing tariffs and surcharges that factor in more than weight.

Have a Strong TMS

Planning ahead with a robust transportation management system helps shippers consider all the aforementioned factors while using less labor. With a solid TMS, shippers can easily compare carrier rates, streamline pickup processes, and build long-lasting relationships from a network of vetted carriers. Schedules can also be better managed with a TMS that can utilize years of data to forecast required labor estimates in real-time.

A multi-carrier shipping application like the Honeybee TMS™ can be especially beneficial to simplify processes and consolidate goods so that suppliers are able to ship more, less often. In planning ahead with predictive software, suppliers can increase delivery lead times, take advantage of off-peak shipping, and simplify scheduling processes for determining labor needs.

Contact CTSI-Global today to increase flexibility in managing your capacity needs.

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