Tackling Excessive Logistics Costs: A Strategic Approach for Retailers
In today’s dynamic retail landscape, managing logistics efficiently is critical. Retailers often face rising logistics costs due to systemic and operational inefficiencies. At QBCS, we specialize in identifying these challenges and delivering tailored solutions that optimize logistics operations and enhance supply chain performance.
The Challenge: Unpacking Logistics Inefficiencies
Retailers frequently encounter several factors that contribute to excessive logistics costs:
- High Freight Costs
Inefficient routing, low consolidation rates, and suboptimal carrier agreements can lead to unnecessary transportation expenses. - Excessive Handling or Transfers
Fragmented supply planning and limited visibility often result in redundant warehouse movements, adding labor and time costs. - Unfavorable Incoterms
Misaligned commercial terms can increase landed costs and risk exposure when responsibilities are not properly distributed between buyer and seller. - Detention, Demurrage, and Storage Charges
Delays in customs clearance, poor planning, or insufficient receiving capacity can result in containers or goods remaining idle, incurring costly fees. - Fragmented Purchase Orders or Under-shipments
Frequently placing small-volume orders increases per-unit logistics costs and reduces the opportunity for freight consolidation.
These issues negatively impact profitability and extend lead times—particularly in complex, multi-node, and cross-border supply chains.
Our Solution: Strategic Consulting for Logistics Optimization
QBCS provides strategic advisory services to uncover the root causes of high logistics costs. We help retailers implement improvements that align technology, data, and business processes to drive sustainable supply chain efficiency.
Freight Cost Optimization Advisory
By utilizing the merchandising system as a central data source, we:
- Consolidate purchase order (PO) data, supplier information, product locations, and shipping terms.
- Extract this data into business intelligence platforms, such as Oracle Analytics Cloud or Power BI, to identify high-cost routing or inefficiencies.
- Feed optimized freight rules back into the system—for example, by applying preferred routing logic or introducing workflow conditions that flag inefficient shipments before approval.
Shipment Consolidation & Routing Efficiency
To improve shipment efficiency, we enhance PO creation logic within the merchandising platform:
- Capture detailed PO attributes such as supplier, item, delivery timeframe, and receiving site.
- Apply consolidation rules—for example, by enforcing minimum order thresholds or grouping orders within defined delivery windows.
- This reduces the number of shipments, improves trailer utilization, and cuts down on overall freight spend.
Incoterm Strategy Support
We guide retailers in defining and managing Incoterms at either the vendor contract or purchase order level. Our approach includes:
- Evaluating the financial impact of different Incoterms, such as FOB (Free on Board) versus DDP (Delivered Duty Paid).
- Analyzing PO cost structures in combination with actual landed cost data, using integrated finance systems or third-party cost engines.
- Ensuring term selection aligns with business priorities, while minimizing exposure and unnecessary costs.
Detention/Demurrage Prevention
To prevent idle fees and improve flow-through:
- We track PO lifecycle data—including creation, approval, and expected receipt dates—within the merchandising system.
- By integrating with inventory, supply chain, or warehouse management systems, actual receipt dates can be compared against shipping schedules.
- This allows retailers to proactively flag delays and address bottlenecks before detention or demurrage costs occur.
PO Consolidation Advisory
To streamline procurement and shipping:
- We use business intelligence tools to detect fragmented ordering behavior, such as multiple small POs submitted to the same supplier in close succession.
- System automation, such as workflow orchestration or consolidation prompts, helps ensure that purchasing teams combine orders where appropriate.
- This reduces order frequency, improves supplier collaboration, and enables stronger freight consolidation.
Key Benefits
Adopting these strategic improvements offers measurable results:
- Lower freight and customs costs through better planning and execution
- Higher on-time delivery rates
- Enhanced service levels at reduced delivery cost
- More efficient PO lifecycle management, reducing cost per unit
- Stronger collaboration across logistics, sourcing, and planning teams, supported by clear, data-driven insights
Let’s Reduce Your Logistics Costs - Together
If rising logistics costs are impacting your margins or slowing your time-to-market, it’s time to take a more strategic approach. We don’t just identify inefficiencies—we implement practical, data-driven solutions that deliver measurable results.
Are you ready to optimize your freight, streamline your shipments, and regain control of your supply chain? Reach out to us to talk about how we can help your business move smarter and spend less.
