When it comes to managing a shipping company, disruptions to the global supply chain can wreak havoc on your business. Political turmoil, health crises, and increasing fuel prices are among the things you need to worry about, and these factors may very well eat into your bottom line and challenge the growth of your business.
While you don't have direct control over how the logistics industry performs, you can still make decisions that will optimize your company's profitability. Here are a few things to consider for growing the bottom line and expanding your operations across borders.
1. Audit your processes
If you look at your financials and you see higher expenses than profits, then you have a critical problem to solve. To find this problem, you will need to audit your processes and identify where you are spending the most money. Are you spending more on maintaining your logistics assets? Is the company producing fewer sales than usual? You will need to determine why your operational costs are rising if you want to introduce cost-saving and profit-increasing measures.
2. Optimize your workforce
Shipping companies rely on a workforce of operators, warehouse staff, and back-office assistants. Regardless of the number of employees you have on your payroll, it’s important that you develop cohesion among them. It’s not just a matter of reducing or expanding the workforce. You need to create systems and workflows that optimize collaboration and minimize redundancies. Consider using the right workforce management tools and provide opportunities for upskilling employees. Not only will these increase productivity, but they’ll also reduce employee attrition and recruitment costs.
3. Keep track of finances
Tracking your expenditures is critical to maintaining a healthy bottom line for your shipping company. Apart from preparing financial plans, you also need to come up with a cash flow forecast, set key performance indicators for each quarter, and prepare a profit and loss statement. All of these require a great deal of work, but they help you analyze where you stand in terms of finances and implement the right cost-saving measures. Alternatively, you can always hire a CFO service that specializes in transportation company finances. Getting one can spare you from doing guesswork and help you make the right decisions.
4. Improve your lead generation and marketing efforts
When it comes down to boosting your revenue, it’s important to highlight the role of your marketing and sales departments. If your business is not meeting monthly sales quotas, consider taking a good look at your lead acquisition, nurturing, and conversion processes and determine what needs to be added or changed. If you’re not getting enough conversions, it could be that you're targeting the wrong decision-makers or sending the wrong materials in each step of the customer journey. Setting up a marketing funnel should help you spend less money per lead and enhance your ROI.
If you want your shipping business to prosper, these tips should help you chart a path towards generating more profits and powering your expansion.