Navigating Supply Chain Issues: Cost Saving Measures for Improving Your Transportation Costs

How many times have you opened your computer to read another article about a port lockdown or a bridge shutdown? The news impacting the transportation of goods is endless. Prices are increasing exponentially, and carriers are taking hard stances, passing rising costs to their customers. A nationwide labor shortage is directly impacting manufacturing goods, not to mention the availability of parts. Demand continues to grow in all sectors, with expectations mounting around faster delivery times and two-day shipping. Oh, and consumers also want to know exactly where their package is at all times.

It sounds like a pandemic (pardon the term). Still, after nearly two years (or more!) of managing these disruptions, manufacturers are beginning to take a different approach to how they respond to supply chain challenges. What can a company do to stop reacting to the latest issue and take control?

More than you may think. 

Often, when business gets busy, it’s easy for manufacturing leaders to avoid the situation and think, “I’ll deal with X problem tomorrow.” As a result, we tend to put off dealing with supply chain issues until some point in the future when we aren’t so swamped with the daily grind.

However, steps can be taken to control transportation costs, strengthening a business’ position and providing more visibility into its supply chain. Additionally, the added visibility can ensure best practices are implemented, hold expenses to a minimum, and concentrate more on our core business and less on the subsequent fire at hand.

How do we do this? By investing in a plan.  

Developing a plan to gain control of transportation costs begins with the process of gaining control of your shipping, both inbound and outbound, and determining the best price/service balance for your business. A formal system allows you to produce all the needed paperwork all at once and track your shipments in one place.

Consider taking the following steps to get started:

• Begin to audit all your bills.
• Capture the data that will make a difference and analyze it to see where you can improve operations and/or cut costs. Consider a dashboarding system that would provide this data instantly – saving your valuable time and the possibility for manual errors.
• Look at every step and each link of the supply chain for savings or possible cost avoidance. Are there alternative modes or carriers to consider?
• Consider “Cost Avoidance” as a strategy if “Cost Reduction” is unachievable.
• Think of the bottom line. Look for opportunities in domestic transportation, rather than just focusing on international air and ocean shipping.
• Consider CITTA Brokerage Co. CITTA Brokerage Co. is one of the leading drawback brokers in the U.S. They can look at a client’s duties paid as a whole and tailor a program to ensure that the refunds are maximized to their fullest potential.

Dave is a CPA and principal at Maner Costerisan, an award-winning full-service advisory and accounting firm headquartered in Lansing, Mich. He leads the firm’s manufacturing team. He may be reached at dnielsen@manercpa.com or 517-323.7500.