%201.svg){kind=small}
Latest posts
Download resources
Transportation costs: definition & important aspects for buyers
.jpeg)
Transportation costs in a nutshell:
Transportation costs include all expenses for the physical transport of goods from the supplier to the recipient, including loading and unloading, insurance and customs clearance. In purchasing, they are a significant cost factor in the total cost of ownership and must be strategically taken into account when selecting suppliers and drafting contracts.
Example: A medium-sized company reduces its annual transportation costs by 15% (from €200,000 to €170,000) by consolidating deliveries from three different suppliers in Asia in a consolidated container and changing the order cycles from monthly to quarterly.
Contents
What are transportation costs?
Transportation costs are the expenses incurred in moving goods from one place to another. They include all costs associated with the physical movement of goods, such as freight costs, packaging, insurance and additional fees. These costs are an integral part of the supply chain and directly affect the total cost of a product and a company's profit margins.
Core elements of transportation costs
Importance of transportation costs in purchasing
In the procurement process, transportation costs play a decisive role in overall pricing and influencing supplier selection. Effective management of transportation costs can lead to significant savings and strengthen the company's competitiveness. Buyers must therefore analyze and optimize transportation costs in order to shorten delivery times, reduce costs and increase the efficiency of the supply chain.
Transportation costs: From manual management to freight spend management
Based on the central role of transportation costs in the total cost view of purchasing controlling, it becomes clear how essential efficient handling is for the profitability of a company. Traditional methods for managing these costs are reaching their limits in a globalized and digitalized world. In order to meet the increasing demands and realize cost savings, a change to modern solutions is essential.
Old: Manual transportation cost management
Traditional approach: In traditional practice, transportation costs are recorded and managed manually. This involves the manual processing of incoming invoices, individual negotiations with each carrier and the maintenance of extensive spreadsheets for cost control. The processes are time-consuming and error-prone, with a lack of real-time data making decision-making difficult. In addition, the lack of process costs often leads to excessive costs and missed savings potential.
New: Freight Spend Management
Freight Spend Management: Modern companies rely on digital platforms and software solutions to manage transportation costs efficiently. Freight Spend Management enables the central recording of all transport expenses in real time. Automated processes such as electronic invoice verification and integrated freight tenders minimize errors and speed up processes. Demand analysis tools provide in-depth insights into cost structures and enable strategic decisions that can lead to cost savings of up to 15%.
Practical example: Increasing efficiency in the consumer goods industry
A leading consumer goods company implemented a Freight Spend Management System and reduced its annual transportation costs by 10%. By automating invoice verification, the administrative effort was reduced by 50% and the error rate for freight invoices was virtually eliminated. In addition, real-time analysis of the data enabled the company to negotiate better with freight forwarders and reduce costs in the long term.
Conclusion on the optimization of transport costs
Transport costs are a key cost factor in purchasing that can be optimized through careful analysis and strategic planning. A holistic view of all cost components, the use of digital tools and close cooperation with suppliers are crucial here. Only those who systematically record, analyze and optimize transport costs can remain competitive in the long term and implement sustainable transport solutions at the same time. Increasing digitalization and new technologies offer promising opportunities for even more efficient transport cost management.
