Freight Forwarder Cost Structure-Case Study
Introduction
The oak business consultants served one of the most challenging clients of the logistics service industry, founded in 1997. The business involves the customer logistics processes in transportation, storage, and logistics designs or packaging. Our client store products in their warehouses, where the logistics process begins and they reach their final destinations. Our client wanted us to prepare a detailed freight forwarder cost structure model to identify their costing, price per service, budget, and weekly variance report.
Challenges/ problems
It’s a challenge to provide a comprehensive and efficient overview of our clients, each logistics service costing separately, in which the company has different categories of services and is required to track all their operations.
It developed complications when our client did not know the per unit price; our team was required to research and identify the suitable per unit price to increase the profitability and reduce the cost.
Our client operations had already started, but they needed to reduce the cost to increase the profit and had insufficient reports to identify their operation’s lacking points. Thus, they wanted us to figure out an ideal cost schedule and present it weekly.
Solutions
We Prepared a dynamic, user-friendly, and able-to-track detailed costing schedule of operations, in which clients could get their different relevant estimations—based on changing structure. We helped our clients estimate different assumptions to make strategic decisions.
Through the thorough analysis of our client’s previous invoices, we developed a changeable automated schedule of the unit prices of categories, and they could compare their outcomes and make decisions.
Moreover, our expert team provided a weekly budget and variance report in which the freight forwarder cost structure model included the actual and forecasted sales, labor costs, net profit, and variances. This effective schedule played a vital role in reducing costs and identifying profitability.
Costing & Stack reports
Input and Service costing
Our team prepared flexible and dynamic costing assumptions that can be changeable per requirement and used to compare different scenarios to make decisions. This freight forwarder cost structure model estimates all services of our client efficiently. Furthermore, it developed relevant information on each category with fixed and variable costs.
Process
Our team prepared the process schedule for our client, by which they can track, estimate and control. Additionally, this model facilitates our client to get all kinds of variable and fixed costs. Therefore, our process costing model includes six different estimations for each activity. It will have to estimate the actual costs, time, labor, and cost per box.
Budget Weekly
In the weekly budget schedule, our team prepared the budget as per our client’s requirements. Here, we estimated the total sales coming from each category and the units from each operation for seven months. Moreover, we forecasted the breakeven point in this freight forwarder cost structure model to analyze operations performance. Also, the breakeven point is where cost and income are equal.
Variance Report Weekly
Our team prepared weekly variance reports for our client to identify the actual and forecasted sale, variable and labor costs, and the variance status with feasible and not feasible. This weekly report also helped our clients analyze their performance and cost criteria to recognize which is better for the company’s progress.
Conclusion
Our team provided exceptional service to our logistics and shipment services company and fulfilled their financial and business requirements. Our client increased their profits and control on costs efficiently by reducing them strategically. Moreover, with the help of dynamic freight forwarder cost structure and estimations provided by our team. We thoroughly analyze market research and financial forecasting while preparing and developing different cost structures, estimations, and financial and business models. Further, Oak business consultants aim to provide our clients with exceptional financial and business services. Therefore we coordinate and schedule meetings to fulfill all our client’s needs and to update them about the progress. In addition, oak business consultants consider every aspect of the company to give our clients a critical viewpoint in growing their business success journey.
