Persuing methods of growing your transport and logistics business might seem challenging when considering the massive landscape change that resulted from the covid19 viral outbreak. However, regardless of the industry that your business is operating in, reducing expenses is often the most effective method of achieving growth. While reducing expenses will directly increase profits, even if only by a small margin, operating on reduced costs also means you have a heightened chance of keeping the lights on should lockdown measures be reimposed as a result of second and third waves of the virus.
Suppose you are among the fortunate business owners who have managed to keep operating during the pandemic. In that case, there is no better time than now to reevaluate your costs and implement even minor restructuring tactics to keep your business going. The following effective ways to reduce expenses are specific to transportation and logistics businesses.
Rent Or Purchase Used Vehicles And Equipment
Purchasing brand new trucks, trailers, or vans can set your business profits back substantially. Unfortunately, even though new vehicles and equipment required to keep your business running might seem like the best choice, now is not the time for any business to be spending large amounts. Instead of amending your business expenses budget to accommodate the massive cost of essential new vehicles, you should consider affordable solutions. You can consider purchasing used international trucks and equipment or renting the vehicles and equipment you need is also an excellent idea.
If you are planning on purchasing used vehicles, you should always evaluate the condition from a professional viewpoint, which can be done with the help of highly-skilled truck mechanics. However, by opting to purchase used vehicles thorough a reliable retailer that showcases warranties and service plans, you will be able to enjoy peace of mind in knowing you have made a money-savvy purchase. On the other hand, when it comes to renting vehicles and equipment, you may find that affordability is the main benefit as maintenance and other costly aspects are usually included in the rental price.
Reducing Labour Costs With Automation
Your goal when reducing expenses should never be to reduce your number of loyal employees. However, if your small scale transport and logistics business are unable to afford employee salaries to perform certain operations, you can consider automation. Automation will provide benefits that include a reduction in labour costs, decreased product damage, lowered production costs, and improved efficiency. Automatic container loading and unloading systems are relatively new to the industry, and you may feel somewhat uncertain regarding the implementation of such technology. However, with the right approach, your business will flourish while reducing costs at the same time.
In addition to this, you can also create incentive programs for warehouse employees, implementing automated warehouse mobility while encouraging employees to boost their efficiency. This effort will effectively help you reduce your overhead costs in terms of labour expenses and the amount of equipment required for warehouse processes.
Enhance Storage Density
Renting massive storage premises to store products for shipping is one of the significant costs associated with running a logistics and transportation business. Even though you cannot remove this cost altogether, you can better utilize space to enhance storage density. This effort means you will essentially need less storage space in total. To implement better use of warehouse storage space, you should evaluate the packing strategies used by employees while considering safety requirements at the same time. You can encourage maximized organization during packing processes and make adjustments to organization recommendations to further enhance storage density.
Alternatively, you might notice that your current warehouse hosts unused space. In which case, you should consider the cost savings benefits of renting smaller premises instead of holding onto unused space that you are paying for. Merely reducing the expense of warehouse premises can drastically reduce your overall budgetary amount.
Outsource Entire Additional Business Departments
Your businesses core functions are to store and transport goods to customers. However, you won’t only be needing warehouse employees and drivers as businesses rely on various departments to function. The decision to hold onto core employees and outsource the additional departments to suitable service providers will drastically reduce your overall expenses on labour. By entire outsourcing departments such as human resources, marketing, customer services, and even sales, you will be able to access industry experts for a small fraction of the cost of actually employing comparable expert teams.
Outsourcing entire departments also mean that you will be able to focus solely on core business functions, all while relying on experts to grow your business, keep your customers content, and handle all those extra pesky details that can be a time-consuming nightmare for any business owner. Therefore, you won’t just be reducing costs, but also enhancing business efficiency drastically.
Conform To The Pandemic
Conforming to the new requirements implemented by the impacts of the global pandemic won’t likely save your business money. However, such changes will ensure your business can continue to function during these uncertain times. Specific impacts have altered the way companies operate as stringent health and safety measures are essential for workplaces and employees. Some such changes include the implementation of extreme sanitation of work environments, vehicles, and employees. You will also need to screen each employee for symptoms at the start of each business day and keep a logbook of all screenings.
Purchasing bulk disposable face masks, sanitation essentials and other health and safety items may seem like an extra costly spend for your business. However, when considering that even an isolated covid19 outbreak within the workplace can shut your doors indefinitely, the spend is noot debatable for companies hoping to survive the pandemic. Countless businesses around the world have closed their doors as a result of covid19, which is why it has become more critical than ever before to care for the health and wellbeing of your employees honestly. Therefore, you should consider maximizing health and safety while adhering to covid19 regulations.