Transport costs concern not only the distribution of goods, but also the earlier stages: supply and production. According to data from a scientific paper Modern cost accounting in logistics approximately 10-35% of sales revenues include logistics costs.
Reducing transport costs seems to be the opposite of high-quality customer service. Financial cuts are usually associated with a possible decrease in service quality. Nevertheless, modern IT systems can positively influence many aspects of the functioning of the vehicle fleet and entire transport departments.
Logistics costs are growing rapidly
Logistics costs are constantly growing. This is due to factors such as inflation and fuel price increases. According to the portal Car World the increase in the price of a liter of petrol in Poland is the highest among all European countries. Reducing transport costs has probably never been so necessary for Polish entrepreneurs in the transport and logistics sector.
However, entrepreneurs are aware that reducing costs is not necessarily a good solution in the face of strong competition and intense competition for customers. The quality of customer service is currently one of the most important factors that determine whether customers will want to use the services of a given transport company.
More and more is expected from transport. In the eyes of customers, the process of delivering and other transport services should be transparent, fast and error-free. For obvious reasons, this is not easy to achieve.
Logistic costs can be reduced even in times of price increases
Despite the difficult situation that TSL entrepreneurs find themselves in, there are ways to maintain high quality customer service while reducing transport costs. Logistics costs can be effectively reduced using intelligent systems for route optimization.
Route optimizer is software based on the operation of artificial intelligence algorithms, which is used for more effective fleet management. The task of such a system is to better plan routes and generate savings for companies in the TSL industry. However, route optimizers have numerous functionalities that allow, among others, for better service.
In this case, reducing transport costs can go hand in hand with high quality customer service. The system is used to streamline fleet operations, looking for savings in both daily and long-term activities: planning shorter and more efficient routes in real time, optimizing the working time of coordinators and drivers, saving fuel or tires. In such a case, the quality of customer service cannot suffer in any way. And importantly, thanks to better fleet management, the quality of customer service can even improve.
How does the route optimizer impact the quality of customer service?
A route optimization system not only allows TSL companies to reduce logistics costs. We present 3 aspects of route optimizers that help improve the quality of customer service.
Deliveries always on time
Routes planned by the optimizer take into account many factors, making them not only faster but also easier to implement. Tasks can be carried out with great precision using the system. The route optimizer will determine the route according to time windows and will take into account the type of vehicle, driver and region. The quality of customer service with such planned routes increases, because customers can be sure that the delivery or service carried out for them will be carried out at the right time of day or even the exact hour. Transport companies using route optimization not only reduce their logistics costs, but also become a trustworthy business partner.
Better informed customers
Another benefit of using a route optimizer, a benefit for both customers and the transport company, is better information flow. Thanks to direct access to maps, the coordinator always knows where a given driver is and at what stage of task completion. In a situation where a customer calls with a question about the status of their delivery, the coordinator can quickly and precisely provide an answer.
At the same time, the route optimizer allows you to add and subtract points from the route in real time. This is an extremely useful function, for example, in the case of a sudden request from a customer to speed up the delivery.
OTIF coefficient at a high level
The On Time in Full ratio is the percentage of orders delivered on time, complete, out of all deliveries made by the transport company. Structured processes allow for on-time deliveries and eliminate human errors, which are inevitable in the case of manual planning of routes and daily plans.
Increasing OTIF enables the provision of better quality services to customers. Additionally, presenting a high ratio to potential, new contractors can convince them to start cooperation.
Reducing transportation costs is within reach
Reducing transport costs does not only apply to large fleets of vehicles. Very good route optimization results are achieved with both medium and small fleets. The optimizer is an effective tool that allows you to generate significant savings in times of rising prices while maintaining the level of customer service quality - without having to cut or transfer costs.