Variable costs offer an ideal way for many shippers to keep money in their proverbial pocket when things are slower without sacrificing service when orders pick up.
Too many fixed costs can sink any business—especially newer businesses without a steady profit stream. Fixed costs refer to recurring costs such as rent, taxes, utilities, salaries, and other such necessities. Unlike fixed costs, variable costs fluctuate based on multiple factors, such as product volume or service usage.
In most cases, variable costs are preferred because they adjust proportionately to the peaks and valleys of the business. Variable costs offer an ideal way for many shippers to keep money in their proverbial pocket when things are slower without sacrificing service when orders pick up.
While some of these costs cannot be avoided, many can be converted to variable costs by enlisting a third-party logistics (3PL) provider. The following expenses can be made variable via outsourcing:

MANPOWER

The supply chain sector faces a shortage in both skilled and unskilled labor, making it difficult for many shippers to maintain a reliable workforce. This shortage extends from the warehouse floor to the manager’s office.
While reliable labor is perhaps one of the greatest benefits offered by 3PLs in general, turning labor into a variable cost offers a substantial positive impact on the bottom line. The 3PL handles human resources, insurance, visa and other benefits, all while scaling labor up or down based on demand for each client.

TRANSPORTATION

The fixed cost of logistics can eat away supply chain budget. Point of concern is that assigned budget whatever it is, will be consumed either supplies are made or not. As in company own managed fleet for logistics, only fuel cost can be reduced in case of no supply. Whereas 90% of budget can be saved if turned to variable cost by outsourcing logistics to 3PL service provider.
3PLs roll these costs into their customer rates, often providing a substantial discount over what the shipper would pay for the solutions directly. Given the narrow margins faced by logistics providers, most have invested heavily in a full suite of supply chain solutions to drive efficiency in every area. Customers ultimately benefit from these investments at a much lower cost.

REDUCE YOUR FIXED COST BY OUTSOURCING TO 3PL

3PLs offer cheap and cost efficient solutions for to turn potentially crippling fixed costs into more manageable variable expenses. Evaluate your fixed cost today, you may find it alarming to your company budget. Reach out 3PL and ask how they can help you in reducing the strains of fixed costs on your budget.
Would you like to know how Road Star can help you in saving your budget by outsourcing, contact us at info@roadstartransport.ae or visit www.roadstartransport.ae