The Importance of Understanding Your Freight Boarding Costs

To remain competitive in the global aerospace supply industry, suppliers must be able to view and understand freight boarding costs. From our experience, we have found that suppliers typically fall into these categories:

  • No visibility of costs, therefore no understanding
  • Visibility of costs, but no understanding
  • Visibility and understanding

To reach the ideal category of having visibility and understanding of freight boarding costs, suppliers must first be able to gather together critical pieces of information throughout the supply chain. Yet, it’s not enough to just gather the information.

There are many different factors that impact the final cost, which points to the need to be able to drill down to understand transportation costs at the SKU level. When you achieve this level of understanding, you can set internal pricing guidelines, adjust transportation costs based on the variables of weight and dimensions, and take into account the origin, destination points, and urgency of delivery.

How Does Achieving Visibility Reduce Freight Boarding Costs?

Aerospace suppliers know that disruptions and risks come with the territory of operating on a global scale. To offset these risks, take a proactive approach. Use the information from your supply chain to make plans that account for disruptions.

Why? Production and delivery schedules can only be met with proper planning and visibility in the supply chain. Having visibility throughout the process allows for adjustments in planning and sourcing so that disruptions can managed.

The key is embedding flexibility and adaptability into your supply chain so that you are not at the mercy of disruptions. However, it’s not enough to only view the information in your supply chain. You need to be able to understand where costs are coming from, the causes of unnecessary or rising costs, and the risk areas in your supply chain.

A common risk for aerospace suppliers is choosing a “cheap” carrier for delivery, believing that it’s worth the risk of pinching a corner to offset another cost. Penalties due to delays will quickly offset any savings provided by using the “cheapest” carrier.

Who Can Help You Achieve Understanding of the Supply Chain?

Simply put, the freight invoice is only a portion of the landed cost of transportation. If you cannot achieve understanding of where the other portion of costs is coming from, you will quickly incur unnecessary costs. This often leads to reactive decisions to cut costs elsewhere, such as choosing a “cheap” carrier for delivery.

Freight forwarders such as Aerostar Global Logistics have their finger on the pulse of challenges along transportation lanes to help suppliers achieve understanding. We are consultative in our approach to deliver options that maximize cost savings while reducing risks.

One of the ways that we help aerospace suppliers reduce their costs is through on-time performance. This is backed by our 98.8% on-time performance delivery rating.

Our history of success and total commitment to delivering complete and on-time is why customers choose us for freight forwarding. We have flexibility in our service offerings and certainty in our performance. That’s why our reputation rides with your cargo™.

Contact us today to discuss a global freight forwarding solution to meet the domestic and international needs of your aerospace supply business.

Logistics Risk Management Plan: How to Mitigate Risk in the Aerospace Supply Chain

Suppliers in the aerospace industry know there are inherent risks that come with operating on a global scale. You could try to create a massive plan to manage every possible risk in the supply chain, but the cost would be equally massive, creating financial risk.

Instead, consider how to create a smart logistics risk management plan that puts your company in a position to balance cost vs. risk factors without compromising your operation and customer relationships.

1. Identify Your Predominant Logistical Risk Factors

Every aerospace supplier needs to strategize a unique risk management plan. No two suppliers are alike in terms of their size, location, product, or capabilities. Therefore, you need to take time to assess the risk factors specific to your operation.

Risk factors for suppliers include:

  • Meeting the on-dock date for your customer
  • Delivering your product without damage
  • Completing last-mile delivery

Then, you need to identify what the typical causes of these risks are. The common ways that risks present themselves in the supply chain include:

  • Production delays
  • Carrier delays
  • Space allocation constraints with the carrier
  • Non-supplier related disruptions

Take inventory of your operation — both the risk factors and the causes of risk that apply directly to your company.

2. Strategize a Solution to Mitigate Risk

After assessing the risk factors that apply to your operation, develop a risk management plan to address issues throughout your global supply chain.

Where should you start? Proper forecasting. You need to leverage your data and the industry trends to proactively plan for each risk. You cannot rely on a reactive approach trying to scramble your resources to solve a problem or meet a tight deadline. It’s highly inefficient and costly over time.

Starting with forecasting will also allow you to build resilience and flexibility into supplier partnerships. A harmonious working relationship will reduce the presence and impact of risks in the supply chain.

Proper planning also allows for a transit time that utilizes low-cost transportation methods. When you plan ahead, you can deliver on-time at the lowest possible rate instead of adding significant costs for faster delivery.

3. Work With a Logistics Partner to Support Your Risk Management Plan

We recognize that aerospace suppliers are under a tremendous amount of pressure trying to balance cost and risk factors to meet deadlines and deliver on quality.

Our company offers superior service by shipping products through the most complicated and risk-filled global supply chains. We deliver certainty with a 98.8% on-time performance rating.

To achieve this performance rating, we follow a strategic approach that includes:

  • Participating in forecasting for aerospace suppliers
  • Offering multiple transportation options to manage velocity and cost in the supply chain

Through this collaborative effort, we help suppliers identify and anticipate risks before they materialize and to help control costs.

Work with our knowledgeable and experienced team to develop a logistics risk management plan that fits your operation. We look forward to delivering your supply domestically or internationally on-time and without damage. Because our reputation rides with your cargo™.

Contact us today for a Rate Request.