For every business, inbound freight is an integral component of their supply chain. If companies neglect their inbound freight strategy, the transportation process can become complicated, full of hidden costs, and overspending is a result.
For many companies, different parts of the supply chain are given more consideration than other parts. In fact, in some companies, inbound costs can attain 40 percent of the entire transportation budget.
How to reduce inbound freight costs?
Freight management must be controlled in order to reduce costs of incoming shipments. With this in mind, you can identify optimization opportunities and identify gaps that need to be filled. It’s not just about cost-savings when it comes to analysing and improving your inbound freight movement. It enables more visibility into your supply chain and fosters more committed relationship with your vendors.
- Review your approach
Ask yourself if your vendors meet the compliance program standards, what level of supply chain visibility you have, and how much control you have over inventory movement. Relationships with your vendors are crucial, and the key for these relationships to be successful is communication. Most likely, you’re losing out on many of the benefits of a collaborative partnership because you’re not communicating.
To get the most from your inbound shipments, you’ll need to stay up to date on the current state of the economy to determine whether you should put in more or less oversight. This will help you find opportunities to cut down your inbound freight spending.
2) Enhance visibility with technology
Supply chain executives can set their own terms and conditions for suppliers and vendors with the help of inbound software. This consists of deciding which parties will enter the shipment information. One option is to have the supplier enter the shipment information so that the logistics team can be notified and book to meet business requirements. The executives could authorize the supplier to work with preferred carriers and suppliers, which results in reduced costs. Either way, it is always at the discretion of the executives to decide the best process based on inbound software insights.
3) Enforce a retail compliance program
In a vendor compliance program, the retailer or consignee and the supplier come to an agreement with stated terms and conditions when moving freight. Vendors must comply with delivery times and other performance requirements outlined by retailers. As a part of this agreement, the consignee also specifies penalties for the supplier’s failure to comply with terms and conditions. The vendor compliance program gives both parties a clear picture of how they work together and has a significant impact on performing inbound shipments.
Inbound freight management with Dexters
In summary, the more transparent your inbound freight is, the better. Dexters can help you reduce your inbound costs with our inbound freight solutions. Consider applying for a free, no-obligation Freight Bill Analysis or Logistics Opportunity Assessment to see how you can save on your logistics strategy!