Prices are rising everywhere we look, from food to fuel, and this is having a knock-on impact on courier companies who either need to reduce costs or increase prices, or both, in order to remain viable. With a great many companies operating in this sector, competition is strong and consumers are always searching for the best deal. To this end, it is important to develop a business strategy to reduce shipping costs and improve efficiency in order to retain loyal customers and generate new business.
Strategies to reduce shipping costs
1. An efficient fleet of vehicles. Swapping to vehicles with better fuel economy figures will save money and this efficiency can either increase profits or be passed on to customers. This option is most viable for companies with vehicles on hire purchase agreements that can easily be amended at low or no cost.
2. Offer a range of delivery timeframes. If customers recognise that you have viable alternatives to same-day delivery, they can either choose to reduce their costs by selecting a longer timeframe to deliver, or better justify the increased cost associated with a same day or next day delivery.
3. Offer discounts to loyal customers. Partnering with online retailers or other regular customers offers the opportunity to increase the number of deliveries that you are offered in exchange for more competitive business shipping fees. This increase in volume can offset other collections and deliveries within the locality, representing better overall value for money.
Strategies to improve efficiency
1. Update your technology. You can use the data from the trackers that are fitted to your vehicles to optimise their routes. It is possible to improve customer satisfaction by automating manual booking processes for a more streamlined customer experience. In fact, there are many ways in which technology can be utilised within the logistics industry to deliver hard benefits.
2. Promote your USP. Clients can justify increased business shipping fees where they feel the benefit. If you are able to handle emergency last-minute deliveries or have specialised vehicles for transporting vital medical supplies, make sure that your target audience knows about it. There is little point in having a unique selling point if you don’t advertise the fact.
3. Work as a team. When all members of a courier company’s team are on the same page, with the same list of priorities and individually allocated deliverables, they can work more effectively. Regular team meetings take the guesswork out of the day job and allow staff the freedom to make appropriate, cost-effective decisions.
There is no simple, one-size-fits-all solution to remaining profitable in this challenging economic climate, but by making small changes and empowering your staff, it is possible to see a difference in your cash flow relatively quickly.