In today's economic climate, transportation costs are becoming an increasingly heavy burden for small and medium-sized logistics and transportation enterprises. Rising fuel prices, escalating labor costs, and competitive pressure on freight rates have many businesses struggling to maintain profitability. However, with the right strategy and appropriate support tools, optimizing transportation costs is entirely feasible. This article will share 5 practical ways to help small and medium enterprises effectively reduce logistics costs.

Why are logistics transportation costs increasing?

Before diving into specific solutions, it's important to understand the factors driving logistics costs higher:

Fuel cost group: This is the largest cost component, typically accounting for 30-40% of total operating costs. Fluctuating fuel prices make it difficult for businesses to control their budgets.

Labor costs: Salaries for drivers, assistants, and dispatch staff are constantly rising. Many businesses also have to accept vehicles running under capacity or returning empty due to lack of effective fleet management tools.

Depreciation and maintenance costs: Vehicles deteriorate quickly without scientific maintenance schedules, leading to high unexpected repair costs and prolonged downtime.

Hidden operating costs: Unoptimized routes, circuitous driving, unreasonable order allocation... all create wasteful expenses that businesses struggle to identify without tight monitoring systems.

For small and medium enterprises, controlling each of these costs is often neglected due to lack of professional management tools. This is precisely why the solutions below become important.

Method 1: Optimize delivery routes

Route optimization is one of the fastest ways to reduce transportation costs without additional investment in fixed assets.

Problems with manual methods

Many businesses still assign routes based on the experience of dispatchers or drivers. This approach easily leads to:

  • Circuitous driving, repeatedly visiting the same areas
  • Not accounting for real-time traffic conditions
  • Uneven distribution of delivery points among vehicles
  • Excessive time spent on planning

Smart route optimization solution

Applying route optimization algorithms helps:

  • Reduce travel distance: Calculate the shortest route for multiple delivery points, saving 15-25% on fuel
  • Account for real constraints: Delivery time windows, vehicle capacity, cargo types
  • Flexible adjustment: When urgent orders or unexpected situations arise, the system automatically recalculates the optimal route

A modern TMS software will have this feature built-in, allowing dispatchers to complete the task with just a few clicks instead of spending hours drawing routes on paper maps.

Method 2: Consolidate trips and group orders by area

Trip consolidation is the art of maximizing the capacity utilization of each vehicle trip, ensuring vehicles always run at full capacity and minimizing empty running.

Benefits of effective trip consolidation

  • Increase vehicle fill rate: From 60-70% up to 85-95%, maximizing weight and volume utilization
  • Reduce required trips: Fewer vehicle trips mean less fuel, less labor, less cost
  • Increase revenue per trip: Transporting multiple orders in one trip helps optimize logistics costs per product unit

Smart order consolidation strategy

By geographic area: Group orders in the same district or along the same route so one vehicle can serve multiple customers in the same journey.

By delivery time window: Arrange orders with compatible time windows to optimize schedules.

By cargo characteristics: Consolidate orders with similar requirements (general cargo, refrigerated cargo, fragile goods...) to select the appropriate vehicle type.

However, manual trip consolidation is extremely complex when the number of orders reaches dozens or hundreds per day. This is when TMS transportation management software demonstrates its value with the ability to automatically analyze and suggest optimal consolidation plans in just seconds.

Method 3: Manage fleet according to actual load capacity

One of the causes of cost waste is using the wrong vehicle type for each order.

Common situation

  • Using large trucks to transport small loads because actual load capacity is not tracked
  • Allowing small vehicles to be overloaded, causing vehicle damage and legal risks
  • No clear classification of capacity for each vehicle in the fleet

Effective fleet management solution

Build detailed profiles for each vehicle: Record maximum load capacity, cargo bed volume, suitable cargo types, technical condition.

Assign vehicles based on actual data: The system automatically suggests the most suitable vehicle for each order or group of orders based on weight, dimensions, and special requirements.

Track utilization performance: Periodic reports on average fill rate, km/order, helping identify areas for improvement.

Scientific fleet management not only reduces fuel costs but also extends vehicle lifespan, reducing depreciation and maintenance costs in the long term.

Method 4: Monitor fuel and maintenance costs in real-time

Fuel and maintenance costs are two major expenses that are difficult to control without a rigorous monitoring system.

Control fuel costs

Record actual consumption: Track fuel consumed per trip, per route, per driver to detect anomalies.

Compare with standards: Set standard fuel consumption rates for each vehicle type and route to evaluate performance.

Detect fraud: The system alerts when there is a large discrepancy between actual consumption and standards, helping detect fuel fraud.

Proactive maintenance management

Periodic maintenance schedule: Establish maintenance schedules by km or time, with automatic reminders before due dates.

Track repair history: Store complete maintenance history and parts costs, helping predict costs and identify frequently problematic vehicles.

Prevent sudden breakdowns: Timely maintenance helps avoid roadside breakdowns, reducing emergency repair costs and losses from delayed deliveries.

Digitizing fuel and maintenance data in TMS software gives businesses an overall view, enabling decisions based on actual data rather than intuition.

Method 5: Apply TMS software to automate operations

All the above solutions can be implemented manually, but for small and medium enterprises that typically handle dozens to hundreds of orders per day, applying TMS software is an inevitable step toward sustainable transportation cost optimization.

What value does TMS software bring?

Process automation: From receiving orders, vehicle allocation, route optimization, to journey tracking and cost reconciliation - everything is done automatically, minimizing errors and saving time.

Centralized data: All information about orders, vehicles, drivers, and costs is stored centrally, easily searchable and analyzable.

Reporting and analysis: The system automatically generates logistics cost reports from multiple dimensions (by vehicle, by route, by time), helping management clearly see waste points and improvement opportunities.

Scalability: As the business grows, the software can scale accordingly without changing basic operating procedures.

DeliTMS - TMS solution for Vietnamese enterprises

DeliTMS is specially designed for small and medium logistics and transportation businesses in Vietnam, with features including:

  • Automatic route optimization for hundreds of delivery points
  • Smart trip consolidation suggestions based on area and load capacity
  • Comprehensive fleet management with GPS tracking and journey history
  • Real-time fuel and maintenance cost monitoring
  • User-friendly Vietnamese interface, easy to use
  • Reasonable cost, suitable for small and medium enterprise budgets

Investing in TMS software is not an expense but a profitable investment, typically helping businesses recover costs in just 3-6 months through operational savings.

Where to start? Optimization roadmap for small and medium enterprises

Many businesses wonder where to start when wanting to optimize transportation costs. Below is a suggested roadmap:

Step 1: Assess current situation (1-2 weeks)

  • Detailed statistics of current logistics costs
  • Identify the biggest waste points (fuel, empty running, unoptimized routes...)
  • Evaluate current operating processes and tools in use

Step 2: Test quick solutions (2-4 weeks)

  • Start with 1-2 simplest solutions like consolidating trips in the same area or improving maintenance schedules
  • Measure results to maintain motivation
  • Collect feedback from dispatchers and drivers

Step 3: Implement TMS software (1-2 months)

  • Choose software solution suitable for scale and budget (such as DeliTMS)
  • Input vehicle, driver, and customer data into the system
  • Train staff to use the software
  • Run parallel with old processes in the initial phase

Step 4: Continuous optimization (long-term)

  • Monitor TMS software reports weekly
  • Adjust strategy based on actual data
  • Expand application of advanced features
  • Set specific cost reduction targets for each quarter

Expected results

According to the experience of businesses that have implemented optimization, transportation cost optimization can deliver:

  • 15-30% reduction in fuel costs through route optimization and trip consolidation
  • 20-40% increase in dispatcher productivity through automation
  • 10-15% reduction in maintenance costs through proactive management
  • 25-35% increase in average vehicle fill rate

Optimizing transportation costs is not an unattainable goal but entirely feasible for small and medium enterprises with the right strategy and appropriate tools. Applying TMS software like DeliTMS is a strategic move, helping businesses not only reduce logistics costs but also enhance competitive capabilities, serve customers better, and build a solid foundation for sustainable growth.

Start today - assess your costs, identify the biggest waste points, and apply at least one solution from the 5 methods above. The results will speak for themselves.