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.