Reducing Logistics Costs: Effective Strategies and Solutions

On the eve of the New Year holidays, we conducted a survey among our clients to create this article for you. Specifically, we asked them how they chose a logistics company to delegate cargo transportation issues in Ukraine, Europe, and America.

If you are an entrepreneur or an experienced businessman but are unsure whether it is possible to reasonably reduce transportation costs, this material is for you.

How to Reduce Logistics Costs

Transportation is one of the key expense items, but it can be optimized. Here are proven ways to save on international shipping:

• Choosing the optimal Incoterms. Selecting the right delivery terms (e.g., FCA instead of EXW) allows shifting part of the logistics costs to the seller.
• Route optimization. The least costly and fastest linear routes without transshipment. Consider cargo consolidation—purchasing space in a container or truck.
• Warehouse cost savings. Partner warehouse services are cheaper than renting and maintaining your own storage facility.
• Optimizing customs clearance. To avoid delays at customs, prepare documents in advance and work with professional brokers.
• Long-term cooperation with carriers. This benefits both clients and logistics providers. Stable shipments lead to better rates, volume discounts, and exclusive offers.

To understand where you're losing money, conduct a detailed cost analysis at each stage of logistics. Compare rates and terms from multiple carriers.

Ways to Manage Logistics Costs

Understanding cost reduction principles is easy, but implementing them in practice is much more challenging. Automation and analytical tools, which DiFFreight actively utilizes, help:

• Reducing warehouse logistics costs with WMS (Warehouse Management System). This minimizes errors, speeds up order processing, and lowers personnel costs.
• Automating and digitizing our routes. Implementing TMS (Transport Management System), using GPS trackers—real-time cargo tracking. We analyze Big Data and KPIs (cost per kilometer, vehicle load, losses).
• Audits—effective cost reduction in logistics: identifying weak points, inefficient nodes, and improving routes.
• Managing customs procedures: preparing paperwork in advance to avoid delays at the border.

If you own a warehouse or handle last-mile delivery for your clients, these management methods will be beneficial!

How to Choose a Logistics Company

The best way to reduce logistics costs is to choose a reliable logistics partner. Three essential questions to ask a potential carrier and key cooperation points are discussed below.

What to ask transport partners?

1. Do you have individual conditions for requests?
2. What are the maximum delivery times and will there be compensation in case of delays?
3. Can you guarantee on-time delivery?

We will not be responsible for all of them, since not everyone can maintain such a high level of service (and this is not a trick or a trick). And we will say for ourselves:

1. Yes, after the client contacts us, we develop an individual plan, prescribe unique terms of the contract and plan the route of your cargo in the fastest ways. Moreover, you will be accompanied at all stages of cooperation by a personal manager for peace of mind and confidence.
2. The maximum delivery terms are given after discussing the terms of cooperation and determining the type, route, and complexity of cargo transportation. Issues of compensation are also prescribed in the contract before the start of cooperation.
3. We will do everything necessary to meet the deadlines if this is sea delivery of goods. Usually, customs clearance takes 1-2 days. But sometimes there are cases when the customs authorities conduct an inspection of the cargo, which can delay the customs clearance process. With the transportation by sea itself, it is a little more complicated. We can choose the shortest route, choose "direct service" (the container will not be transshipped from ship to ship in transshipment ports), but even this does not guarantee the promised transit time.

What to pay attention to when concluding a contract?

On the experience and reputation of the company. You should not entrust the cargo to intermediaries who do not have a full-fledged service, but simply drive trucks around Europe. Since they have higher rates, and you have more risks. After all, it is unlikely that such offices provide a guarantee, take responsibility and create safe conditions for the transportation of goods.

It will also be your advantage if future logistics partners have an ISO certificate. He is the guarantor that the company complies with all international requirements and provides guarantees for various terms of the contract. Therefore, do not choose those who have "cheap and fast". Choose those who have "quality, reliability, with 24/7 support".

What should your logistics partner take care of?

About saving as much money as possible. And they closed all transportation issues in one company, instead of turning to individual specialists or services. After all, if you do everything yourself, you can come across charlatans and irresponsible ones and, as a result, overpay twice.

So that there were no such regrets and all the client did was call and say: "I want to send the cargo" - we have managers. They are the ones who will advise you on all questions regarding transportation. And in the future, they will deal with the determination of parameters, the preparation of transport documents and other processes. All you have to do is contact us.

Who should do the design?

If the company is an intermediary and not an official carrier, then all the paperwork will be on you. And if the logisticians are a brand with an extremely high level of service, then they will take care of all the issues. Thus, you will be able to determine the level of service at other stages of transportation.

Cooperating with us, you will save not only 13%, because we currently have the most favorable tariffs for transportation to any country. But you will also receive impeccable service, clearly defined guarantees and terms of cooperation, and successful transportation of your cargo within the specified time.

Reducing Logistics Costs with DiFFreight

Cost-saving methods in transport logistics always come with risks. It’s crucial not only to save money but also to maintain quality.

To offer you the best conditions, we have expanded our services from simple shipping to turnkey deliveries. With us, you can save money by ordering multiple services in one place (and, of course, at more favorable rates):

• warehouse services in China and Europe;
• product inspection;
• customs brokerage services;
• sea, air, and road freight in various directions.

You only need to contact us and forget about all the transportation concerns. By partnering with DiFFreight, you will save not just 13%—as we currently offer the best rates for international logistics services to any country—but also receive impeccable service, clearly defined guarantees, and cooperation terms, ensuring your cargo is delivered on time.