Page 10 - Logistics News - Issue 02 - 2024

L O GI S T I CS C O S T S

destination, cargo type, volume, lead times and any special Improving supply chain efficiencies. Removing non-value-
requirements. Then, benchmarking platforms, industry reports adding processes to eliminate waste and improve vehicle
or specialised logistics consultancies can be used to access turnaround times at loading and offloading points.
market data for comparable routes and scenarios.
Transporters, in turn, can:
It is essential to consider several crucial factors while Invest in efficient equipment. Newer trucks with fuel-
comparing actual rates to benchmark rates. Are the shipments efficient technologies and proper maintenance can significantly
exactly alike? Do they both involve the same type of transport reduce fuel costs.
and lead time? How do the compared regions’ fuel prices,
infrastructure conditions and regulatory environments differ? Diversify revenue streams. Exploring specialised services
These nuances must be factored in to ensure a balanced and like refrigerated transport or door-to-door delivery can offer new
meaningful comparison. growth opportunities.

Interpreting the results goes beyond identifying deviations Embrace technology. Adopting telematics, integrated mobile
from the benchmark. It is necessary to consider the reasons applications and route planning tools can improve efficiency and
behind any discrepancies. Are higher rates justified by reduce risk.
exceptional service, specialised equipment or faster delivery
times? Conversely, always bear in mind that the lowest market Embracing the digital age: how technology
rates might carry hidden costs or potential risks that are not empowers cost-ef cient transport in South
immediately apparent. Africa
In the realm of South African logistics where every rand counts,
Ultimately, rates benchmarking is a powerful tool for technology emerges as a potent weapon in the battle against
understanding your position in the market, negotiating with soaring transport costs. Embracing digital solutions isn’t just
your transport service providers or customer and optimising a fad, it’s a strategic imperative for both manufacturers and
your transport costs. By meticulously analysing the data and transporters seeking to optimise operations, trim expenses and
factoring in the broader context, you can confidently navigate stay ahead of the curve.
the complex world of transport pricing and make informed
decisions that drive cost-efficiency and business success. Manufacturers: Harnessing the power of
transportation management systems (TMS)
Beyond rates: a holistic approach to cost For South African manufacturers, a robust TMS becomes an
reduction indispensable companion. A TMS unlocks a treasure trove of
However, rate benchmarking is just one piece of the puzzle. A cost-saving features, from streamlined procurement and route
holistic approach to cost reduction requires a collaborative effort optimisation to real-time shipment tracking and automated
from both manufacturers and transporters. invoice reconciliation.

Manufacturers can optimise their processes by: Centralised visibility. No more juggling spreadsheets,
Centralising transportation management. Defining a robust WhatsApp groups and phone calls. A TMS provides a single
transport strategy that complements the overall business platform for managing all transportation needs, offering holistic
strategy, consolidating volume with fewer providers, can lead to visibility into routes, costs and performance. This empowers
better rates and improved efficiency. companies to identify inefficiencies, negotiate better rates and
optimise transportation budgets.
Adopting leading technology solutions. Utilising platforms
for load allocation, route optimisation and real-time tracking can Route optimisation. Gone are the days of inefficient,
streamline operations and reduce costs. meandering routes. Advanced algorithms in TMS software
suggest the most cost-effective and time-efficient paths,
Collaborating with transporters. Building strong considering factors such as traffic patterns, fuel consumption
relationships, open communication and transparent reporting and driver compliance. This translates to reduced fuel costs,
can lead to mutually beneficial solutions. faster delivery times and happier customers.

8 NO V E MB E R/D E C E MB E R 2024 www .l o g ist i csn e w s .c o .z a