Learn what is route optimization, how it works, what makes it different from route planning, and the effect of optimization on cost.
How to Cut Costs of Wholesale Construction Materials Delivery
Learn how to reduce costs of your wholesale construction materials delivery by using route optimization software to increase efficiency.
In this new post, we’re going to show you how to lower the costs of wholesale construction materials delivery.
We’re going to show you how to use route optimization software to improve delivery efficiency.
To keep operational expenses down.
Without raising the price of building supplies.
Resorting to retail.
Or transferring costs to customers in any way.
So if you want to get ahead in the wholesale building supply industry, this article is for you.
Let us begin.
The Software That Helped Others Cut Costs in the Construction Industry
To start cutting costs, you’ll need route optimization software.
A tool like eLogii can save up to 42% of construction materials delivery.
Routing software does this by optimizing how you plan and deliver building supplies to customers, including construction sites, contractors, and retailers.
Let’s illustrate with an example:
Let’s say you have a medium fleet of 20 to 40 vehicles.
After adding this information to our ROI calculator, you can see how much money you save.
For each vehicle in your fleet, you save $1,126.67 per vehicle per month.
With 20 vehicles, this amounts to a monthly saving of $22,533.40:
And for 40 vehicles, your total savings amount to $45,066.80 per month:
But there’s an additional benefit:
You’re not just cutting costs, you’re also improving efficiency.
And raising operational performance in other areas of your delivery helps you to save time.
For example, it boosts customer communication efficiency:
Or improves driver performance:
So you won’t just cut expenditure, you’ll also have the time to fulfill more orders.
That means you can add one or two new drop-offs to your driver’s schedule.
Times the number of vehicles in your fleet…
Plus, the fact that you’re delivering wholesale construction materials…
You get our point.
The benefits you stand to gain from route optimization software are clear.
But why should you care in the first place?
The Importance of Cutting Down Transportation Costs
Transportation costs make up most of the operating expenses in delivery.
In fact, it makes up 50.3% of all logistical spending.
While it’s obviously cheaper for your customers to buy wholesale, the cost of transporting those building materials to them can (and does) gut your margins.
So lowering costs in delivery can have far-reaching results.
In fact, 25% of companies state that delivery efficiency is their biggest last-mile challenge:
Localz - Biggest last mile challenge
According to another study, last-mile expenses make up 40-50% of the total supply chain!
That’s more than twice as much as any other expenditure, including warehousing.
One way to tackle this problem is to automate your last-mile delivery with software.
Taking into account that the global construction and building materials market size will continue to grow at least until 2030, it isn’t a bad idea to make your wholesale building supplies available to a wider audience.
So lowering delivery costs is especially helpful when it’s time to expand to new markets.
And compete with others in your industry.
A solid way to beat competitors is to make your delivery more convenient.
For example, with free shipping.
But, 97% of organizations and businesses say they can’t sustain free shipping without reducing delivery costs via automation.
And in today’s world where free and efficient shipping is King, route optimization software can help you stay ahead of the game.
5 Effective Ways of Lowering Costs of Delivery of Wholesale Building Products
Shipping costs of wholesale building materials include many variables.
Among them, some hidden expenses that may not be aware of.
In this part of the article, we’ll address that.
And reveal five ways to slash the costs of delivering wholesale building supplies:
#1 Run Reports
Do your customers receive building supplies in bulk orders?
Or do you ship one kind of construction material at a time?
A wholesale construction materials business ships orders together consistently.
Be it in bulk or one type of product at a time, you need visibility.
Running reports is the way to do this.
But gaining this kind of insight is difficult to do manually.
Route optimization software gets around this problem by providing total visibility over the last mile.
Every task you upload to a platform like eLogii has information about each order. You can do this automatically in bulk via .CSV files:
Or using the routing API to connect the platform with your order management system:
And since routing software operates on the cloud, it stores all of this data in one place.
Which means you can access historical data to see what construction materials customers are ordering.
This is valuable if you want insight on materials trends and their movements.
For instance, you can spot a pattern of delivery timeframes among some customers.
Then, you can adjust vehicle fleet schedules around those times.
Or you may realize that some materials sell more often at certain times of the year.
That allows you to adjust buying frequency from suppliers and manufacturers.
Which means more efficient transportation, and fewer costs.
#2 Work on Your Onsite Material Management
When managing construction storage, material loss can be a big problem.
(Especially if you manage it remotely.)
A big concern here are pick-ups and drop-offs.
Specifically, how you schedule pick-ups at depots.
And how you drop-off large or multiple orders to customers.
If you’re not careful, pick-up and drop-off times can overlap and create bottlenecks.
To avoid this, route planning software also helps you to plan better delivery schedules.
The software enables you to sequence pick-ups at depots based on ETAs.
So once one vehicle is loaded and ready to start its route, another arrives to take its place.
Besides reducing bottlenecks, it also lowers downtime.
#3 Level Up Your Packing Process
As we have mentioned, the packing process is a vital chain of the logistics operation.
The simple misstep of using the wrong materials can mean spending more money on shipping (and potentially damaging the materials).
Here, size matters. A box of the wrong size can damage materials during deliveries.
Companies that dispatch dozens of drivers with wholesale building products can send out perfectly good supplies to the customer.
While the customer receives damaged and wrecked supplies, unusable and unsellable.
And it’s up to you to cover these costs, and handle the returns.
While eLogii can help you painlessly handle reverse logistics, you’ll have to optimize your packaging at loading facilities.
And there are a number of ways you can do this.
But in our experience the best way to do it is to:
Measure your products and buy custom packaging
Wrap fragile materials in protective packaging
Use the right vehicles, containers, and equipment
Limit the amount of materials you load onto vehicles
In fact, as of this year, eLogii can help you with the last one.
We’ve added new route optimization modes to our engine.
One of them is the Load Balancing Mode:
And you can use it to better distribute orders and shipments when loading vehicles.
#4 Choose Dynamic Route Optimization
There is route planning and optimization, and then there is dynamic route optimization.
This is an automated way to plan delivery routes, while your drivers have already set off.
And to maximize resource utilization, time, and expenses.
There are many factors that impact the delivery: traffic conditions, weather, new, last minute orders, changing schedules, and more.
eLogii, specifically, can take all of this into account real-time routing.
This feature enables you to route vehicles live.
You can adjust and re-optimize routes to react to unpredictable events on the road.
Or add new assignments to existing routes and delivery schedules:
In doing so, you can:
- Avoid additional cost
- Keep drivers on optimal routes
- Add more value to existing routes
#5 Use Proof of Delivery (PODs) for Effective Shipping
Finally, use proof of delivery to reduce costs of delivering wholesale building materials.
Proof of delivery (POD) is a document that confirms the customer has received the correct order, including all the items within a specific order.
While this used to involve pens and paper, most route optimization apps today have ePODs.
Drivers use their phones to review each delivery with the customer, and confirm its success by collecting the POD.
This also acts as a fail-safe. With eLogii, you can set up PODs as a requirement for delivery completion:
And you have the option to select which PODs the driver has to collect (barcodes, signatures, images, QR codes, and more).
This information is automatically updated as soon as it’s collected on the app.
And dispatchers can review it via the dashboard, if any problems come up.
In that way, you ensure each delivery is a success or not.
And helps you to keep track of failed delivery attempts and returns.
We mentioned above that it wouldn’t be a bad idea to consider expanding your business to make it accessible to customers from all over the world.
Such a feat involves user-friendly online ordering, delivery tracking, and prompt deliveries by integrating e-commerce and multichannel sales. Fulfill these orders received through multiple sales channels efficiently, and you will meet high-demand expectations while lowering delivery costs.
Summing Up: How to Cut Costs of Wholesale Construction Materials Delivery
Cutting delivery costs of wholesale building materials has never been easier to map out, thanks to the advanced tech we have at our disposal today.
By implementing a well-built delivery management platform, you can start today by lowering your costs and improving your business.
But don’t take our word and advice - try eLogii yourself!
With eLogii, you can plan, route, and optimize your delivery with ease and expertise. Here is a more precise breakdown of what this next-gen delivery management platform can do for you:
- Route optimization - Hundreds of routes are analyzed and optimized in seconds.
- Real-time tracking - You can track your deliveries in real time and turn on notifications to easily react and re-optimize routes.
- ROI calculations - You get a precise insight into your saving possibilities with eLogii’s ROI calculator.
- Seamless data handling - Importing Excel and CSV files is an easy feat with eLogii. You can bulk import them with mapping and integration into any system.
- Electronic Proof of Deliveries (ePODs) - eLogii provides PODs in the shape of barcodes, signatures, photos, etc. You can view them in just one click.
Pro usage tips:
- Ensure you are focused when handling CSV task files since they have many fields.
- Get to know the filters right from the start.
- Organize training for your team members so they can use eLogii.