How to Control Logistics Transportation Cost Effectively?

Transportation function is one of the seven basic functions of modern logistics and occupies a very important position. Transportation cost accounts for a large proportion in the whole logistics system. Effective control of transportation cost plays a decisive role in saving the total logistics cost.

Factors Affecting Transportation Costs

There are many factors that affect the high cost of logistics and transportation, including the lack of professionals, the lack of strategic cost awareness and the lack of full cost awareness. There are technical factors, such as backward transportation technology and equipment, lack of popularization of advanced management technology and management information system, unscientific transportation planning, etc. There are some institutional reasons, such as cost accounting and imperfect assessment system. There are also policy reasons, such as repeated investment and construction of transportation resources, resulting in unnecessary waste of resources and unreasonable comprehensive transportation planning.

Due to the contradiction of benefits between logistics functional elements, other logistics functional elements also play an important role in reducing transportation costs. For example, in order to reduce transportation costs, organizing large-scale transportation, group transportation, large-scale transportation and few-batch transportation is conducive to saving transportation costs, but this will undoubtedly increase the warehousing costs of logistics, resulting in a backlog of funds for enterprises, which is not conducive to the rapid circulation and turnover of funds and increase financial costs. On the contrary, in order to reduce storage costs, enterprises can adopt advanced production and management concepts such as " zero inventory", shift the pressure of inventory to transportation, distribution and production, and adopt a multi-batch and small-batch procurement mode, which will inevitably increase transportation costs while reducing inventory costs.

The factors affecting the transportation cost are diversified and comprehensive, which requires the analysis of transportation cost to adopt a systematic view and conduct comprehensive analysis. In the process of controlling the cost of logistics transportation, comprehensive management should also be carried out.