Most program and project managers would reasonably concentrate very little effort on how shipping and logistics affects their projects. Often, the lion-share of your energy is devoted to keeping your main scope on track, moving seamlessly. I’m here today to convince you that, depending on your project, it is likely worth your time to dive a little deeper into the project management shipping costs associated with your product.
Here’s why:
1. Shipping Costs are buried in your product line items
During a budget review, if you saw a line item for “Shipping: $50,000” you would be excused for asking “what the …?.” Yet when instead you see “Servers: $250,000” or “Marketing Displays: $25,000” – you may move on quickly.
For almost any physical product moves, not surprisingly, there are shipping costs built in. Vendors, rightly so, often provide all-in quotes, which means getting the item to your door as well. Mechanically, this is simple, but it results in obfuscation of your true costs, and eliminates your ability to question/reduce those costs. Shipping costs can be hard to determine, but estimates can show they can make up 20% or more of your total cost if you’re not careful.
2. Emergency parts/equipment can kill your budget
When critical machinery breaks down, or a display kit breaks at your latest conference – getting a replacement is about speed, and not cost. With that in mind, there is still a good way and a bad way to manage expedited shipping.
The proper process depends on having multiple Courier Companies at the ready to deal with these types of situation (and can cover your geography), but suffice it to say you need to coordinate with your logistics team to understand what process your company uses.
Why? Because “calling one of the big guys” can cost you 50-70% more on an already expensive shipment, than an otherwise good process can.
3. Pricing can be locked in ahead of time
If you know you have to travel somewhere next month then most likely you are going to book a plane asap to get the best rate. For obvious reasons – in general, the cost of your flight will go up as you get closer to the date because airlines know you have less options. Shipping is not substantially different in this respect.
If your project requires a lot of shipping throughout, then it makes sense to quote and lock in pricing ahead of time. Not only does this allow for better pricing but it will also give you more cost certainty for your project.
