Understanding Hidden Costs in Your Supply Chain
As businesses are scrutinizing every dollar spent on logistics and transportation, it makes sense to understand exactly where costs are being incurred.
When the Council of Supply Chain Management Professionals (CSCMP) released results from its annual “State of Logistics” survey in June 2016, it cited strong growth in the $82.2 billion parcel and express sector, which had been fueled by double-digit growth in eCommerce. While hardly a surprise, the strong pace of growth in eCommerce would seem to be a boon for online retailers.
But maybe not as much you might expect. Consider a separate survey, the “Walker Sands Future of Retail 2016” study, which was reported on by Marketing Land and found nine out of 10 survey participants expected free shipping on their eCommerce orders, while 68 percent said they expect free returns and exchanges.
In fact, free shipping and product returns are among the many factors that often go unreported when considering overall transportation spend or logistics costs. Such “hidden costs” can result in a business losing track of the actual costs of transporting goods or, worse, being unaware of the additive impact of these costs on the bottom line.
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