PLS Logistics - February 2016 (LM)

"Inbound Freight Costs are Rising. What are logistics managers doing to better manage costs?"

Inbound logistics is a complex process that can consume more than 40% of the average organization’s annual freight budget, according to Aberdeen Group, which estimates that total inbound freight spend alone consumes between 3.6% to 5.2% of a firm’s total annual sales. Due to inbound freight savings’ direct impact on the organizational bottom line, shippers that make it a supply chain priority reap significant inventory efficiencies, better cost containment, and a higher chance of achieving productivity and service goals.

As customers’ service level expectations and demands continue to expand and change, inbound product flow is becoming increasingly complex. In search of new ways to manage shipping costs, more companies are turning to inbound logistics management providers for support. By ensuring an efficient and cost-effective flow of goods and information across multiple entities, these providers manage the transport, storage, and delivery of goods coming into a shipper’s location and contribute to the development of comprehensive supply chain management strategies.

As a leading cost element within the supply chain, transportation is coming to the forefront of shippers’ cost reduction, efficiency, and operational excellence strategies. Focused on the procurement and movement of raw materials, inbound freight management is facilitated by real-time freight tracking, transportation optimization, good routing practices, and transparent pricing structures. Effectively reducing costs requires a combination of logistics expertise, proficiency, technology, and automation.

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