Logistical costs are all expenses related to the logistics of a given company. That is, they relate to the expenses of packages, transport and storage. However, the lack of planning in decision-making often results in excessive costs.
Therefore, analyzing industry operations and making processes more efficient are essential strategies to reduce a company’s costs. It is worth remembering that paying attention to this in the management of logistics costs makes the business acquire more space and relevance.
In contrast, when this does not happen, errors and other inconsistencies may appear in operations, which decreases the effective use of company resources. One of the first steps to solve these issue is to fully understand the total logistics costs of the business and look for ways to improve expenses.
Polyexcel blog prepared a complete article on the main logistical costs, as well as tips on how to organize the company’s expenses. With these practices, it will be easier to invest in growth without losing financial sustainability.
Main logistical costs
The logistics area encompasses all processes that occur in the supply chain. In this system, the flow of materials involves various storage and movement techniques, planning, resources, strategies and employees within a company.
However, logistical costs can be different between one company and another, as they depend on numerous factors. However, there are common aspects in all institutions. Check some types of logistics costs.
Storage and inventory
Logistics inventory costs depend on the volume of products that the company works with and the period that the material remains in the warehouse. Thus, we can conclude that the longer the time and quantity of products, the greater the logistics expenses.
It is also important to note that inventory expenses are divided into product cost, product shortage cost and maintenance. The first is related to the investment that was made in each material obtained by the suppliers, while the second has to do with the lack of items in stock and the impacts that this can cause.
Finally, the third involves expenses related to labor, taxes, physical space rental, inventory and spending on stopped inventory. In addition, working on effective inventory control is crucial for the enterprise to strike a balance between supply and demand.
Fundamental to make a good impression on the customer who receives your product, the packaging acts on the correct packaging of the items. Thus, it is possible to redouble safety and avoid risks of accidents and defects in goods.
With this factor, it is also feasible to save and optimize the use of space. This is because proper packaging can be a great differentiator and generate savings in costs and storage space.
Transportation and freight
The transportation in logistical costs are by far one that most impacts companies, especially those with their own fleet. This is because this sector involves the acquisition of vehicles, fuel, maintenance, depreciation, idleness, among others.
With problems such as accidents, long-distance deliveries and cargo thefts increasing risk exposure, investing in this sector is critical. Despite raising the final freight price, risk management practices are great options for maintaining the protection of the company’s goods.
With the competitiveness of the market increasing, companies need to deal with the challenge of making their deliveries even faster and more efficient. The good news is that with technological advances these tasks have become easier, since they rely on the automation process.
The use of digital platforms, for example, is essential for the logistics sector to operate with high performance. Another advantage is that it helps eliminate repetitive processes and dramatically reduce errors and inconsistencies. The result is agility and effectively reducing logistics costs.
As mentioned above, knowing about logistics pricing is an essential step in knowing what steps to take. With well-established expenses, the next step is to create an action plan within each logistics sector and improve the techniques.
When there is no structuring in logistics processes, each employee acts in the way he believes he is right, which can generate failures and waste. With that in mind, process mapping may be the best solution, since it consists of adopting more efficient practices.
For this, understanding how the flow of business activities works enables managers to re-layout the production. But it is worth remembering that this process needs to be reviewed periodically. Only then is it possible to make a better monitoring of the sectors and their productivity.
Performing tasks in manual ways often drives the increase in expenses, since more time is lost and the risk of errors is greater. Therefore, automating processes is much more advantageous. With programmed machines and software, the work is done quickly and efficiently.
Learn about Polyexcel solutions!
Polyexcel has been working for 10 years with high performance additive polymers for the power and telecommunications wire and cable market. With these compounds, offering protective characteristics to electrical connections becomes an even easier job. To know the products check out our website!