Fulfillment & Third Party Logistics Blog

Discover Hidden Distribution Costs to Maximize Your Efficiency

A wide number of costs can factor into effectively running a distribution center.  Because many of the expenses are essential and unavoidable due to the nature of the business, they are considered hard costs. However, it is very likely that a distribution center accrues unnecessary expenditures that may go unnoticed on a monthly basis. When distribution centers are experiencing top volume growth, most of the operating outlays are excused or overlooked in an effort to produce timely deliveries.  Most troubling is that such expenses can continue to have a negative impact on the bottom line of the distribution center for years. Every dollar wasted takes away from critical investments in future advancements in equipment and technology. With a movement toward more specialized, omni-channel logistics, it will become necessary to invest into new systems and processes, making every penny saved all the more valuable. 

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Reducing Enterprise-Wide Transportation Costs

The fuel surcharge (FSC) has been accepted practice in the transportation industry for decades. In the 1980’s and 1990’s FSC was typically a short-term measure to help carriers through a temporary spike in the cost of fuel. A typical FSC in those days was 1-2%. Today the FSC is a fixed strategy, resulting in a substantial increase in the cost of transportation. The effect on the price of goods is now of material significance.

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