Understanding Hidden Costs in Your Supply Chain

Looking for ways to reduce production and distribution costs without compromising product quality is always a helpful move for businesses and manufacturers. Fine-tuning your fees requires understanding the hidden costs in your supply chain.

Let’s discuss how to find these charges and prevent them from catching you off guard.

Assessing Your Supply Chain

One of the best ways to take more control over hidden costs is to assess the price of each step. For example, shipping products isn’t a standard up-front cost for a business. Costs can fluctuate for many reasons, including the volume of traveling shipments from other supply chains. However, hidden costs like fuel can also catch unsuspecting businesses off guard. Like shipping costs, gas prices fluctuate consistently, so you must check prices every time.

Revealing the Hidden Costs

Beyond the shipping costs, you have to think about how manufacturing and monitoring quality products impact your budget. For instance, if an accident happens during the transportation of your goods, you may have to ship a second product to your customer if the product is not salvageable. Mistakes should be spotted during internal quality assurance checks, but problems with products can occur when they’re on the move. If a shipment reaches its destination damaged and unsalvageable, you may have to pay for freight charges to ship a new product, which isn’t free.

Even holding onto goods can cost you because you have to think about the costs of the facility you’re keeping those products in and the professionals overseeing the storage process. Likewise, if damage occurs during storage, you must replace the product. Taking these details into account will help ensure you understand the hidden costs in your supply chain.

Working With Hidden Costs

Uncovering hidden supply chain costs and preparing for them before each shipment will likely sound daunting because you may not know where to start. This is why it helps to work with a logistics specialist, such as a 3PL. As a 3PL, Diversified Transportation Costs works with you to find the optimal transportation strategy, like by preparing international air freight and more solutions. Work with logistics specialists to find the best shipping strategy for both you and the receiver of each shipment. Use the guide above to navigate your shipping costs so you can avoid being blindsided by hidden fees.