Many small businesses in Australia are understandably reeling at the cost increases they are contending with, which are putting a major squeeze on margins.
While business may have limited control over some costs, such as utilities or insurance, there are some areas which are ripe for further examination – one of these is delivery transport.
For any small business that relies on delivering goods, transport costs are usually a top five cost of doing business. A saving of five, ten or twenty per cent on these costs can make a big difference to your bottom line.
Finding the time to re-assess your delivery transport arrangements can pay substantial dividends down the track.
What are some common ways to reduce costs?
Start by addressing the fixed costs in your set-up. Many businesses have a mix of fixed and variable costs underpinning their delivery fleets, usually because they operate some of their own vehicles and drivers, and outsource some of their needs to specialised delivery transport providers.
A timeless challenge is being on top of the fixed costs. For example, if you own or lease vehicles which aren’t being used at their optimum, it is costing you. That transit van which has been parked for the last week is costing you. And it’s costing you more than it was two years ago, because all the intrinsic expenses of running a vehicle, such as insurance, maintenance, and fuel continue to increase.
Isolating your fixed costs is especially important for companies that experience high variability in demand, but any business can benefit by looking closely at fixed costs and pruning the dead wood.
The more you can turn fixed costs into variable costs the more you will only pay for what you need, and save. The key is taking the time to partner with good providers.
The best, most efficient transport fleets are responsive. They can increase or decrease their resources at short notice. This is only possible if you have partnered with an operator that has the reach and the resources to look after you. With the right partnership, it is possible to achieve higher performance at a lower cost.
Another worthwhile cost-saving exercise is conducting a true audit of your delivery fleet – a fleet x-ray, which brings the myriad costs into light. This is a great opportunity to bring hidden costs into the open and to see exactly what can be trimmed.
Fleet efficiency is also paramount. While the technology is available to reliably track the movements of deliveries, many smaller fleets don’t take full advantage.
A little bit of time every day to ensure your fleet is route-optimised and efficient can pay dividends. Companies which focus on their efficiency often find they can perform more deliveries in the same timeframe. Importantly, this means better delivery services for your clients.
This technology can also save you in fuel costs, and prevent vehicles from being used inappropriately.
