Inefficient transport operations can significantly reduce your company’s profit. Transport is a high cost activity that represents a direct cost to your goods or service it is being used for. Left unmanaged, transport costs can quickly increase either through poor utilisation of men and equipment or poor control of operational costs. Typically, every additional pound spent on transport is a pound less to the bottom line.
A review of the planning, reporting and control system used for maximising the utilisation of resources, which optimises the use of dedicated vehicles versus different service providers. A key requirement is to achieve vehicle back loading where possible to avoid sending vehicles on uneconomic journeys.
Fuel represents up to a third of transport costs. Monitoring fuel usage and driving technique, and providing daily feedback to the driver, can achieve fuel savings of up to 5%.
Where subcontractors are regularly used it may be worth considering a formal system of ‘approved’ and ‘preferred’ contractors to drive down rates and ensure agreed terms and conditions of carriage are in place.
For busy traffic offices investing in a traffic management system can be extremely useful in route planning, driver scheduling and the management of subcontractors.
Expenditure on maintenance and servicing should be carefully monitored and controlled in order to ensure all invoices are valid, driver misuse is identified early, and vehicle warranty claims are correctly recovered.
Effective performance monitoring will help identify the productivity of the drivers and whether the vehicles are suitable for the job in hand. Too large and the business is wasting spare capacity. Too small and unnecessary journeys are incurred.
Selecting the right vehicle for the job is only half the task. Also of importance is the need to determine the best way to fund the vehicle; outright purchase, leasing, contract hire or supported by a maintenance contract.
This is a core speciality of our transport consulting team at Davies & Robson and an area in which our consultants support many companies, both users and providers of distribution services, year after year.
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"The process adopted by Davies & Robson, and the result we have achieved, has provided a real step change in the relationship with our transport contractor. Achievement of improved cost control, servi…
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