Freight Forwarder Cost Structure

Introduction

Myinvestorchoice served one of the most challenging clients of the logistics service industry, founded in 1997. It involves the customer logistics processes in transportation, storage, and logistics designs or packaging. Products are stored in our client’s warehouses, where the logistics process begins and they are delivered to their final destinations. It was requested that we prepare a detailed freight forwarder cost structure model to determine their cost, 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. 

When our client did not know the per-unit price, our team had to research and identify a suitable per-unit price to increase profitability and reduce costs. 

The client had already begun operations, however, they needed to reduce their costs to increase profits, and they lacked sufficient reports to identify the areas in which their operation was lacking.  Therefore, they requested that we determine an ideal cost schedule and present it every week.

Solutions

The team prepared a dynamic, user-friendly, and easily trackable detailed costing schedule of operations, based on the changing structure, in which clients could receive different relevant estimates. To make strategic decisions, we assisted our clients in estimating different assumptions. 

We developed a changeable automated schedule of the unit prices of categories based on a thorough analysis of our client’s previous invoices so that they could compare their outcomes and make informed decisions. 

In addition, our expert team provided a weekly budget and variance report in which the freight forwarder cost structure model included actual and forecasted sales, labour costs, net profit, and variances. As a result of this effective schedule, costs were reduced and profitability was identified. 

Reports On Costs and Stacks

Costing of Inputs and Services 

As part of our preparation, our team prepared flexible and dynamic costing assumptions that can be adjusted according to the requirements and used to compare different scenarios to make decisions. As a result of this freight forwarder cost structure model, all services provided by our client are efficiently estimated. Additionally, it developed relevant information on each category with fixed and variable costs. 

Efforts

We prepared a process schedule for our clients, which allows them to track, estimate, and control the process. Furthermore, this model allows our client to obtain all types of variable and fixed costs. We have therefore included six different estimations for each activity in our process costing model. The actual costs, time, labour, and cost per box will have to be estimated.  

Budget Weekly

To our client’s requirements, our team prepared the weekly budget schedule. We estimated the total sales from each category and the units from each operation for seven months. To analyze the performance of the operations, we also forecasted the breakeven point in this freight forwarder cost structure model. Costs and income are equal at the breakeven point.

Variance Report Weekly 

Our variance reports identify actual and forecasted sales, variable costs, and labour costs, as well as the feasibility and unfeasibility of variances. We also provided our clients with a weekly report to help them evaluate their performance and cost criteria. 

Final Thoughts

We met all the financial and business requirements of our logistics company. Increasing profits and controlling costs more effectively, our client reduced their costs strategically. Our team also provides dynamic freight forwarder cost structures. Market research and financial forecasting are thoroughly analyzed during the preparation and development of various cost structures, estimations, and financial models. Myinvestorchoice provides exceptional financial and business services. To fulfil our client’s needs and keep them informed of project progress, we coordinate and schedule meetings. We provide our clients with a critical perspective in achieving business success through our Myinvestorchoic