2020 has proven it’s impossible to be prepared for everything. Not only transportation budgeting but global strategies were interrupted by recent events.
Although the global market has been frequently interrupted in recent months, there are still many things within your control when it comes to your organization’s shipping strategy. It’s important to take advantage of the things that will save you money.
How to Build a More Efficient Transportation Budget
1. Predict freight volumes
To conduct an accurate forecast of freight volumes and lanes, you need a clear and clarified communication process with operational managers, inventory managers, sales, vendors, and analytics. Most companies have their lanes planned far ahead, so this should be an estimate close to the real number. As for freight volume and additional factors, using historical shipping data and considering current market dynamics will be beneficial for forecasting your transportation costs even more precisely.
2. Understand current industry trends
Like everything else, the transportation industry was greatly affected by lock-down measures earlier this year. This led to visible, sometimes drastic changes in the way supply chains operate. Understanding where the industry is will help you set expectations on both available freight and budget requirements. We explored how the industry was influenced by the current economic situation in one of our recent eBooks.
3. Consider extra charges
One of the best tips for accurate budgeting is leaving room for accessory charges. Don’t solely rely on lean inventory or accounting from operational management. With current volatility, your budget should be as flexible as possible.
4. Monitor fuel prices and freight rates
Failing to account for fuel prices and changing freight rates can lead to frequent budget headaches! Be sure to stay one step ahead of the game with a 3PL that can keep rates competitive, no matter the market.
PLS can help your business keep costs down and expectations high during any market. See how our solutions can revamp your supply chain and make your freight operations stress-free!