How can transport and logistics businesses cut costs?

Published Categories: Tags:

Cutting costs should be a key focus of any transport and logistics business. We look at a few simple ways that your business can decrease operating costs now.

Trucks and Commercial Vehicles

The transport and logistics industry's total revenue was just over $96.5 billion in 2017. What's more, the industry is expected to see employment growth of up to 4.5 per cent to 2022, according to Australian Industry Standards data. That proves there's a bright future in transport and logistics if your business adapts well to evolving challenges.

Keeping costs down is one of the most pressing difficulties for many - one that has the potential to put countless operators out of business. To that end, here are five easy ways that your business can start to cut costs for a more profitable 2019.

Get the basics right

There are several simple things you can do to incrementally decrease costs. These small changes are unlikely to provide an instant cash  flow boost, however over time they'll make a difference and leave you with more money in the bank. Examples include:

1. Improving space utilisation: Carry more in your vehicles and store more in your warehouses by simply increasing your stock density and improving your use of vertical space. Invest in better shelving, stacking and packaging equipment to enable this.
2. Reducing energy costs: Reducing your energy costs and overall consumption is relatively affordable and easy to achieve. Installing automated and customisable lighting, heating and cooling controls in warehouses is one option. Alternatively reducing driver idle time, improving routes and training out bad driver habits can deliver great long term cost reductions.
3. Review your insurance: Use a specialist broker to review your current cargo and stock insurance. Too much or too little cover, or cover for the wrong things, can prove costly.

There are countless ways that your transport and logistics business can decrease its operating costs, and refining simple, small details is a great place to start. These measures, and other similar changes are usually affordable and can help free up cash to invest in other measures to increase efficiency.

Automate and upgrade


4. Labour costs are one of the largest expenses for any business, particularly in transport and logistics. The most effective way to reduce these expenses is to improve your businesses automation and optimisation efforts by investing in better tools and equipment.

5. The best place to start is with a Transport Management System, customised to your business. The right system can automatically plan freight movements, select the most appropriate route and carrier and even manage and bay freighting bills.

Such a system can also include modules to manage planning, warehouse space and resources across your business. The cost savings from such features can be considerable. There's no denying that investing in new software and equipment can be expensive, but the potential for future cost reduction is almost limitless. 

It's counterintuitive that the most effective and future-proof cost reduction strategies usually cost money to implement. With that in mind, if you're committed to investing in long term cost-cutting measures you needn't let that initial outlay hurt your short term cash  flow.


Vehicle and equipment finance allows you to make large investments right now and spread the cost out over 12 months or more so that you can continue operating uninterrupted.

The team at Classic Funding Group can help you with how our equipment and vehicle financing options could help you cut costs in the long run.


Get in touch