You experience $500 shipping mistakes every day.
It’s not a large sum of money but when you multiply $500 by the amount of shipments you have, WOW! The amount of money wasted on shipping is crazy. Ludicrous I tell you.
Whether it’s from Singapore, Rio De Janeiro, Amman, or London, when you order 20 parts from 20 different companies you pay 20 different freight bills. It’s as simple as that, no if’s, and’s, or but’s about it. Pure logic. Pure expense. Pure waste.
There’s no revolutionary formula and my future isn’t as a math teacher but I do know we often forget about the true costs of our decisions.
Think about it.
At a minimum you’ll spend $100 for each shipment. But let’s dig a little deeper and say the maximum you would spend is $500. Not a huge freight bill. The problems occur with volume. It’s the power of compounding. If you order 20 parts from 20 different sources you’re spending $2,000 - $10,000 in freight bills.
Expensive indeed! The decisions you make about shipping directly affect your operating income. Most decisions are made in a reactive state, but the true value is through a proactive solution.
Let’s dig into that.
Spending 20X more than you have to on shipping
The middle of your supply chain is complicated. With aircraft component partners located all over the world and your aircraft MRO 2,000km north or south, your supply chain is worldwide. There’s a lot of variables between the aircraft components you need and the aircraft they must be installed on.
There’s also many decisions to be made. Who do I procure from? Are they a reliable and trusted partner? Do I need 1 part or 50? How should I ship these? Should I consolidate? When will I need these rotables and consumables at my maintenance check?
The questions don’t stop. In order for you to reduce your operating expenditure, you have to think about strategic ways to cut unnecessary costs.
Yes, you could beat up your aircraft component supplier on price, but over time that only gets you cheap parts, cheap service, and more problems.
The true value comes from the proactive solutions I keep mentioning. One of these is being more thoughtful of your shipping costs.
Shipping costs are eating away at your operating budget
This week we had a very good client get into a frenzy about a $5,000 shipping charge. She was shipping 1,200 kilos through a terrible freight forwarder. Remember I mentioned cheap service? I mean, these people were beyond ridiculous. And they were sneaky, which is even worse.One of the items was HAZMAT. This silly freight forwarder was charging the entire 1,200 kilos as HAZMAT and it affected the freight bill by $1,000. So our client was essentially paying $1,000 more than she had to.
The moral of the story is, the decisions you make on how you ship affects everything.
In this story it’s about trusting your freight forwarder partner to not price gouge you after they quote you a low freight cost. In other scenarios it’s about making a conscious effort to consolidate and save.
You’ll go from shipping 20 items from 20 different people with 20 different freight invoices, to 20 items from 1 person with 1 freight invoice. It’s streamlined and focused. It get’s even better if you deeply trust and respect this one person. Trust goes a long way.
Once you decide to $ave By Consolidating and focus on an efficient procurement strategy, you’ll begin to save thousands of dollars on wasted freight costs.
P.S. Our Aircraft Maintenance Program is designed by experts in creating efficient solutions for long list requirements. We utilize our $ave By Consolidating process to provide you with rotables, expendables, and consumables, in an efficient and cost effective manner. We also utilize our logistics program to streamline the entire supply chain to you. Interested? Fill out the form below.