How to Reduce the Costs of Shipping

Aug 26, 2019 Dan Cormac Dan Cormac

For any business that needs to do a lot of shipping, whether domestic or international, the costs can sometimes be alarmingly high. If you don’t take the time to research your supply lines and ensure you choose the most cost-effective solutions, you will always be bogged down in shipping costs. Here are some simple ways of reducing the costs of your shipping.

Choose the Best Mode of Transport

There are lots of ways of getting a product from A to B. If you are going to be shipping within the UK, then you have the option of over-the-road trucking for long distances and couriers for shorter routes, or air and rail freight services. Identifying which of these is best and most cost-efficient to your business is vital if you are going to minimise your costs.

Rethink Your Storage

If your business does a lot of shipping, chances are you also need to store quite a lot of inventory. Depending on exactly what the products are and how they are stored, this can present you with various logistical challenges and unavoidable costs. For example, let’s say that you need to store goods that have to be kept refrigerated. Refrigeration will cost extra money, whether you’re paying for a refrigerated vehicle or you are paying the electricity costs of refrigerating in a building.

If you can reduce these costs as much as possible, it will enable you to easily bring down the costs of your entire shipping process, from start to finish. Even if most of your items go directly from A to B, they will still usually need to be stored beforehand. There are lots of ways that you can reduce your storage costs; even something as simple as reducing the costs of electricity for the building can make a difference.

With price comparison websites, it's easy to make sure that you’re getting the best deal on each component - the premises, the security, the electric. For example, you can compare business electricity prices online using Utility Bidder and their free price comparison tool. Identifying opportunities like these to reduce costs at various points in your supply chain will become more important as your business grows.

Be Vigilant of Your Whole Supply Chain

You should be aiming to know exactly where each item that leaves the point of origin will be going. For small businesses, this is easy. However, as your business grows, it can become a challenge to keep track of everything. It is important to know your supply chain so you can ensure cost efficiency, and avoid PR disasters. Using an ethical supply chain gives you an easy marketing angle.

Invest in Your Network

A network is important for any entrepreneur, regardless of the specific field that they work in. However, when you are in the business of shipping, having the right connections can make the impossible suddenly possible. Always be on the lookout for opportunities to rub shoulders with other companies and the businesses that work alongside them.

It isn’t difficult to bring down your shipping and transport costs, but it won’t happen by magic. Make sure to constantly audit your supply chain to ensure it is as ethical and effective as possible.

Dan Cormac knows how to make his money go further. A freelance financial journalist, Dan is passionate about personal finance. Whether you hope to escape the chains of debt, to save for a house, or to retire within a decade, Dan explores the most effective ways you can achieve your financial goals.