Every e-commerce business has a bottom line, a target to accomplish when it comes to managing costs and making profits. Growth and development are going to be more challenging for a firm that breaks even every month. eCommerce businesses may face significant financial hardships as a result of the sudden charges and hidden prices that are common in the e-commerce overseas logistics industry.

These can include additional charges for specialized services like bulk shipments or co-packaging, hidden prices for expedited delivery or cash on delivery, and overall shipping and overseas logistics costs.

In the world of e-commerce, the success of your firm is determined not only by the satisfaction of your customers but also by the efficiency with which you manage your logistics expenditures. Make sure you select the best and most reliable logistics company in UAE for results beyond your expectations. In other words, there are a few simple methods that you can use to keep costs down and efficiency up in the logistics!

Methods to Cut or Minimize the Cost of eCommerce Logistics

These are very efficient methods to cut the costs associated with eCommerce logistics.

• Selecting an appropriate logistics company in UAE

Overseas logistics entails a wide range of expenditures, including labor and handling charges, packaging prices, insurance, fuel surcharges, and many more services. Make sure all potential costs are addressed during negotiations when choosing the best partners of logistic services for your firm. This ensures you get the best price on all the services you need. Certain logistics companies provide discounted bundles or affordable amounts for specific services, such as temperature-controlled transit and COD.

• Reducing delays

Numerous indirect logistics expenses, such as higher warehousing fees, transportation charges, and cancellations, can result from delivery delays. Reducing delays through system maintenance will help you fight these unnecessary costs. This will enable you to predictably pinpoint the numerous reasons for delays and mitigate them through strategic measures.

• Stuck shipments

One of the possible reasons for delivery exceptions is stuck shipments. If a delivery faces an issue during transportation, it could become stuck at a storage facility or en route. 

There’s a potential the package might go missing in addition to the likelihood that the order will be canceled. You can keep track of and find stalled shipments with a system, much like with delayed deliveries.

By using it, you and your logistics company in UAE will be able to understand the reasons behind shipments that become stuck and strive to efficiently resolve each one, thereby minimizing the number of stuck shipments.

• Reducing RTO

Beyond increasing your logistics expenses, delayed deliveries and stuck shipments have another thing in common. Additionally, both of these could be the reason for a high return-to-origin (RTO) percentage.

In addition to these two, there are a plethora of other reasons for RTOs. It normally takes numerous failed delivery attempts for a shipment to become an RTO. False or fraudulent delivery efforts are a frequent reason for delivery failures. 

Additionally, clients might give a false address or phone number. Some people might just reject the delivery. Using an effective NDR system that contacts clients automatically following an unsuccessful delivery attempt enables you to track the many reasons behind RTOs and minimize those in numbers.

By keeping a close eye on things and collecting the necessary information from clients, you can reduce fraudulent delivery attempts and ensure the second effort at delivery goes well.

• Optimizing Returns Procedure

Returns are initiated by the customer, which is an additional factor that raises your overall logistical expenses. Consumers may return defective or incorrect products, and ineffective reverse logistics and tracking systems may cause returned goods to disappear on the way back to the warehouse of origin. Similar focus and attention to detail are required for reverse logistics as for forwarding logistics.

Choosing a logistics company in UAE with a reverse logistics mechanism and an efficient returns management system is the best method to address the waste and expenses related to returns and reverse logistics.

Numerous e-commerce providers of logistic services offer doorstep quality checks (QC) services for returned items and tracking services for returned orders to ensure that they arrive at the original warehouse and are securely placed back into stock.

• Close Monitoring of KPIs

By establishing a defined set of goals for your company to meet, or KPIs (key performance indicators), costs can be minimized more broadly. It is crucial to maintain a system that efficiently tracks and measures several key performance indicators (KPIs), including the number of fake delivery attempts, delayed and stuck shipments, RTO percentage causes, and SLA breaches, among many others. By keeping an eye on these, you may figure out how to resolve issues and incorporate them into your partnership with the best logistics company in UAE.

• Periodic negotiations with couriers

Any relationship can only develop through communication, and this is also true for each partner of overseas logistics that an eCommerce company has. You will always be capable of determining what requirements are to be met and what errors have been made because you will have all the mechanisms in place to track and identify various KPIs. 

Armed with this knowledge, every 3 months (or after an interval of your choice), you should engage in a discussion with the partner of logistic services to analyze their performance throughout that time frame.

You can renegotiate your contract by putting restrictions on different KPIs and defining objectives that must be met in order for the logistics partner to not be penalized. You may, for example, set a monthly cap on the total number of stuck shipments or a lower limit on the total number of NDRs that are converted to successful deliveries. 

The logistics company in UAE will be responsible for paying a specified amount as a fine or penalty if the limitations are not met. Because of your higher volumes, you may now negotiate for better terms or payment options.