8 Ways to Reduce Transportation Costs in Nigeria — And Grow Your Profits
Running a business that involves the supply of goods to customers in different parts of the country or overseas can build up high transportation costs, which eventually eat into your profits. Poor management of these costs causes many businesses to run at a loss for too long, since they find it difficult to manage the high expenses they incur in logistics.
As a business owner in a sector that involves the haulage of goods to customers, you need to constantly be on the lookout for better ways to reduce your transportation costs. These should be a top priority and must be reviewed on a daily, weekly, monthly, and yearly basis till you’re certain you’ve found the best deal that’d work for your organization.
That said, here are 8 ways your business can reduce its transportation costs in Nigeria, Africa, or anywhere around the world:
1). Consolidated Shipments:
When you use a carrier to handle your product deliveries, the transportation costs are usually determined by the weight, volume, distance, and several other delivery variables.
To significantly reduce the transportation costs and grow your profit margins, consolidating your goods in one shipment so they can all be measured together, most likely by volume or weight, can drive the logistic costs down a whole lot.
To reduce your transportation costs in Nigeria, Africa, or anywhere else, consolidating your shipment is a smart thing to do.
2). Use Only One Carrier:
When you use one carrier for all your shipments, you’d come to build a relationship with them, and can over time negotiate a great discount for your deliveries.
Organizations like to keep close tabs with customers who do large shipments through them. They like to ensure they keep those customers around and happy, and would go far enough to do this, even if it means offering them better incentives on the transportation costs of their goods and services.
Using only one reputable carrier till the end can pay off for your business on the long-run.
3). Charge More For Shipping:
The distance from your location to each customer varies, and so, the shipping costs should. But sometimes, even varying logistic costs may not be able to help you turn a profit, leaving you with one last option: to increase your shipping costs.
Increasing your haulage costs while remaining competitive can be a way for your organization to generate more income for itself. While these may cause several customers to become wary, you’d need to spend a lot of time helping them believe this is the best way to have their products shipped fast, on-time, safely, and more.
You could also let your customers know they could still use the original shipping costs, but at a much slower delivery pace, causing most of them to go with your presumed faster deliveries.
4). Source Locally:
How do you get your products? Are they bought overseas, locally in your state, or from other parts of the country?
When you source items overseas or have to ship from another state to your location first, you incur high preliminary expenses, which go on to affect your profit margin.
If you intend to make your final haulage cost have little impacts on your profit margin, shift your focus to local sourcing. And if you can’t find what you need in your state or province, you can source from other states, but within your country.
5). Choose The Best Route:
If you own the haulage vehicle, dispatch bike, or any other transport equipment, choosing the shortest and most efficient route to take will save you a lot of time, fuel cost, and deliver better customer satisfaction.
6). Improve Inventory Accuracy And Visibility:
It is important you improve inventory accuracy and visibility throughout the supply chain. Ensure everything that needs to be supplied at a time is supplied. Ensure every customer that needs to be delivered to, receives their items at the right time, based on the best supply chain practices.
If you do not pay attention to the inventory accuracy, you’d end up going to a location twice, because the wrong item will either be mistakenly sent out for an attempted delivery or some crucial parameters will be ignored.
7). Centralize Your Distribution:
Don’t have products scattered in different warehouses. Going to pick them up for deliveries will cost your company money before you even get to deliver the products.
To drive your transportation costs down, centralize all your products and ensure that when deliveries happen, they’re leaving from one place, making the shipping cost more affordable for the customer.
8). Listen To People:
Above all else, it’s important you listen to the suggestions of people who’ve been in the business before you, your employees, and even your customers.
They sometimes have great inputs to make that wouldn’t just bring down your transportation costs, but will help you deliver more value to your customers.
What are your thoughts on these 8 ways to reduce transportation costs in Nigeria, Africa, or anywhere around the world? Let me know by leaving a comment below.