Transport Cost Reduction Methods

Transport and distribution are the circulatory system of any business, with direct implications in supplier performance to customers, being some of the critical points in Logistics and are some of the measurable indicators which show the ability of a supplier to render quality and competitive services.

Transport costs take 5-10% from the capital circulated by a company meaning they have an important impact on the final profitability of the products and services sold. From this amount, for road transports, the expenses divide into: fuel 40%, personnel 15-20%, taxes 10-15% and carrier profit 25-35%. Based on this percentage split we can understand that carrier selction process weighs very much into the final transport cost. Remember: a low price does not mean a low cost!