In this economy, just about everything comes down to saving money.
So when it comes to shipping products, most businesses are looking almost exclusively at one thing and one thing only: How much is it costing me?
In a Smart Business national survey of CEOs, 76 percent of those polled indicated that they have cut back on shipping or transportation expenditures because of the economy.
While price may be the predominate factor, that doesn’t mean that relationships don’t matter, because if two companies are similar in price and service, then the one you have a better relationship with is going to win your business. In other cases, a company may be more expensive, but they may provide a high-tech solution that your customers demand or one that helps you be more efficient, giving them — and you — a competitive advantage.
But when no such differentiation exists, and assuming a company delivers an acceptable level of service, the only thing left is price. If your packages are arriving when they are supposed to and it’s done at a fair price, does anything else really matter?
With current business conditions like they are, you owe it to yourself and your company to make sure you are saving every penny possible, so don’t just sit behind your desk to figure out if your current shipping company is the best one for you.
In the Smart Business survey, 46 percent said their No. 1 concern about shipping was having little control over the cost. But if you take a proactive approach, you can exercise some control over what’s happening.
Go out and visit your shipping company’s facility and see how your packages are handled, have the company show you its technology so you can see how your products are moved and tracked and get prices from other shippers for comparison. If you don’t have prices from competitors, how do you know if you are getting a competitive rate?
If the services meet your standards but the price can be beat, then you should consider switching providers.
If you do so, you won’t be alone. Of the CEOs we surveyed, 57 percent said they have changed shipping methods or companies in order to save money, and 61 percent said cost was what influenced their decision the most.
But before you make a switch, go back to your existing provider and share your information. Are they willing to match the price of a competitor? If so, you might get a better deal without the hassle of making a change. Keep your vendor’s best interest in mind if you want to make it a deal that can work for both of you. Be willing to trade a longer-term commitment in exchange for a new lower price.
If you decide to make a change, start by talking to other people you know to find out who handles their shipping. Are they happy with the service? Are the rates steady? Start with the companies that have word-of-mouth recommendations from people you trust.
The survey also showed that 63 percent of you own your transportation assets, such as trucks. If this applies to you, take a close look at your operation. Could you save money by outsourcing your shipping? If it seems like you have too many trucks or are spending too much time on logistics problems rather than your core competencies, then going with a third-party provider might be a better option.
In this economy, every cost needs to be examined for areas of potential savings, and this includes shipping. By taking a proactive approach, you may find that there’s a better deal out there or you may find that your current provider is doing a great job at a great price. Either way, you’ll be able to sleep easier at night knowing that money isn’t being wasted every time you ship a package.
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or [email protected].
