Introduction
In every supply chain and for every day to day need, we need different types of Logistics services. We have seen in our locality a delivery boy or mail delivery boy running a van, cycle or Motorcycle and giving parcels to different abodes. He is also a part of a supply chain of a logistics department. In every logistics service, the service provider must keep an eye on the costing and the management and how the flow is. In the old days, only a few mainstream logistics vendors provided services like the most known DHL, FedEx, and the govt. Organisations or associated incorporates. But now many franchisees are in the market, and it’s very competitive too, so to provide better services at a low cost, we need better management.
How competitive the logistics sector is!
Irrespective of the Logistics franchisees, many local and national roadways provide services at very cheaper costs. Mostly the chained roadways logistics are the ones who provide faster services at a very lower cost. Once you come by the formula of all these cycles how the product comes into the hand of a consumer directly from the factory through different branches of vendors in a very compressed pricing bracket, you are ready to go for a spin. Brands like DTDC and FedEx and the king of logistics DHL have given franchisees to the locals. Where a person has invested in the company and also to build an infrastructure to supply in the chain in their locale, and near around keeping his profit with a good margin, there are different types of Logistics services like p2p (Purchase to pay), o2c (Order to cash) and B2b (Business to Business), B2c( Business to Consumer) etc.
- P2P: It usually works for the distributors where a vendor searches for a distributor and make a contract or amendments for a long time. Then after every order from the distributor will be delivered to him by an allotted logistics with a fixed rate.
- O2C usually works as third-party logistics management where a department is allotted to provide the order in exchange for money. Dtdc, FedEx are few examples.
- B2B: It is one of the crucial chains of business, where many business equipment like fridge, cooler and different motor parts are being transported. Companies like FedEx, Gati, and the Indian underdog Delhivery work with this chain of the supply system. Right now, an American B2C giant like Amazon is working on it.
- B2C: The American business giant like Amazon and the Chinese giant like Alibaba are the main part of this system. They work as a third-party service provider where they set up their supplying chain, which provides root to root delivery services in exchange for very low service cost.
How to keep your logistics cost under control
- For better cost management, you need to focus on the closing rate of every day, how many supplies are there in your branches allotment.
- You have to keep changing the service prices by a small amount according to the current fuel rate. Never hesitate to provide low-cost services while the fuel rate is low. It attracts customers.
- You have to keep more men in the supply chain and fields rather than the office. After all, they are the ones who are going to maintain your closings.
- Take as many bookings as possible, try to gather 20% extra bookings from the workforce you have.
- Try to motivate your team to maintain the daily targets, as those targets will pay them up. You have to allot target based salaries.
- The target-based salaries will eventually be the stepping stones for the success of your franchisee.
- Always eliminate risks, make excel sheets and tally them daily before closing.
- Give discounts to the regular customers up to a certain range, and it binds them.
- Give loyalty bonuses but to those who give better services in your department.
- Keep tracking of time, and also keep tracking of the transporter who is allotted for you.
- You must focus on more booking with minimal damage rates. Damages repel customers and clients, which later on will be the cause of defamation of the franchisee.
- Use low maintenance vehicles for services and the ones that burn less fuel and can bear more loads.
- Stay away from keeping drunk drivers on the job.
Conclusion
If you keep maintaining and increasing the targets daily, your logistics service cost will eventually be cut by at least 15%. There is a formula of sales ‘ More the sales, less in margin and, and bulk in profit’. A better logistics service provider will always be the one who attracts more clients, and the services will force them to recommend your offices to their relatives and friends to book their couriers too.
