Logistics optimization

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The ideal way to optimise your logistics

Logistics optimisation is essential to remain competitive in the modern world. It is not just about moving goods from point A to point B, but about finding the most efficient and cost-effective way to do so.

When optimising logistics, particularly transportation, minimizing costs, improving delivery speed and reliability, ensuring sustainability, and continuous improvement are all crucial. Technology and software play a more important role than ever before.

But where do you start when it comes to optimising logistics? It all begins with mapping out the logistics process. Read more about it in our blog post: Mapping the Logistics Process. By identifying and quantifying bottlenecks and opportunities using a specific methodology, companies can prioritize their efforts.

In many cases, logistics optimisation revolves around transportation and transport costs. At Transinnovate, we have years of experience with optimising transportation, costs, service, and sustainability for shippers. We recommend to put the following three pillars in place in your organisation.

1. Data-driven Freight Procurement

Comparing rate tables, or even worse, prescribing rate tables in fixed formats is the biggest pitfall in freight procurement.

Smart procurement aims at finding the best set of carriers for your specific shipment profile, for the service level you need. Comparisons should be based on translating your shipment profile to costs with the offered freight rates. We are often surprised how many shippers do not have accurate insight into their shipment profile.

The next step is scenario analysis to find the optimum mix of logistics service providers (LSPs), also accounting for service level and sustainability.

Cost calculations and scenario analysis do require dedicated and smart software solutions. The result is a transport plan with ideal partners that perfectly aligns with your company’s strategy. Learn more here.

2. Transport Management System (TMS)

Once the plan is ready, you need to make sure it gets implemented properly and efficiently, also accounting for daily challenges and changes. Modern TMS solutions offer the ability to (nearly) fully automate freight operations.

Think about streamlining freight activities including:

smart load allocation
placing of orders
requesting spot rates
scheduling loading docks
managing transport documentation
real-time shipment tracking
and more…

A misconception is also that TMS are big complex systems that are costly and require long implementation times. The most modern TMS systems use the latest SaaS technology and a modular approach. This enables rapid implementation (days to weeks) and customizing at affordable costs for Small and Medium Enterprises up to multinationals. Find more information here.

3. Control Tower

Once you have a plan (from procurement) and means to implement it on a daily basis, this is not the end of the story. In order to capitalise on opportunities for improvement in cost, service and sustainability. This requires a structures and periodic analysis by a Control Tower function that takes a step back from daily operations.

Although a TMS provides the data to feed a Control Tower function, we often see that companies do not have the bandwidth, time or expertise to implement a control tower properly. If this is the case, you can contemplate on outsourcing this. If you outsource a control tower function, then make sure the party running this for you is independent and doesn’t have agreements with carriers that provide a hidden agenda.

A control tower, when executed properly provides a step by step plan for continuous improvement and feeds the next procurement cycle with proper data and real operational (service) experience with the various logistics partners. Discover more here.

4. Extra tips to optimize your logistics

In addition to the above pillats, we have several more tips from our experience that can help businesses optimise their logistics and reduce freight costs in many other ways. By thoroughly analysing a shipment profile, you can easily lower costs by focusing on the following areas:

Load factor simulations: Can you serve the same customers less frequently with bigger shipments?
Routes: Can you create smart combinations with multi-drop shipments?
Modality & Trailers: Can you load more or perhaps in a more sustainable modality?
Inbound: Can you improve by picking up products ourselves instead of relying on deliveries?
Combinations: Can you consolidate shipments?
Return shipments: Can you load backhauls in the vicinity of your destinations, or can you find carriers for who your freight is their return freight?
Surcharges: Where are you paying surcharges, and are they always really required ?
Invoice control: Is everything accurate? Are you being billed correctly?

To optimise logistics effectively, a holistic approach, time, and expertise are required. Do you want to brainstorm with us about your opportunities? At Transinnovate, we understand the importance of logistics optimisation and offer tailor-made solutions for businesses of various sizes.

Whether it’s minimising transport costs, automating freight operations, or providing a Control Tower service, we have the expertise and technology to support companies in their pursuit of efficient and cost-effective logistics.

Feel free to contact us if you would like to explore the possibilities for optimizing logistics for your company.

50 tips on how to save 30% on transportation costs immediately.

Looking to gain more knowledge in optimizing or managing transportation? In our transport guide, we provide you with:

Tips for immediately saving costs on your current transportation.
A wireframe to help you gain control and insight into your current transportation data per shipment.
Insights into knowledge and developments within the transportation industry.

Smarter transport decisions start here.

Manage all your carriers from one place.
Track costs, choose the right carrier, and optimize your transport operations with Transinnovate’s TMS.

FAS Incoterm® (Free alongside Ship)

What is FAS Incoterm®?

FAS (Free Alongside Ship) is one of the official Incoterms®2020 rules published by the International Chamber of Commerce (ICC). It applies exclusively to maritime transport and means that the seller is responsible for delivering the goods alongside the vessel at a named port of shipment. At this point, risk and cost transfer from the seller to the buyer.

Incoterms® are globally standardized trade terms that define who is responsible for transportation, costs, and risk during international shipping. The latest version, Incoterms® 2020, came into effect on January 1st, 2020.

An overview of all incoterms is available here.

The Free Alongside Ship (FAS) Incoterm is an international trade agreement that is used for transport by water. In an FAS arrangement, the seller is responsible for delivering the goods to a named port, placing them alongside the vessel. The transfer of risk and cost occurs when the goods are alongside the ship and ready for export.

Advantages FAS Incoterm®

Clear Transfer of Risk

FAS provides a clearly defined point where responsibility transfers from seller to buyer: when the goods are placed alongside the vessel. This reduces the risk of misunderstandings or disputes.

Buyer Controls the Main Transport

Once goods are alongside the ship, the buyer takes over transport arrangements, which allows them to choose their preferred carrier, shipping schedule, and potentially negotiate lower freight rates.

Widely Applicable in Maritime Trade

FAS is particularly suitable for bulk cargo and large-volume shipments where the buyer has experience managing ocean freight or prefers to control logistics beyond the port of departure.

Drawbacks FAS Incoterm®

Limited Seller Responsibility

The seller’s responsibility ends before the goods are loaded onto the ship. If damage occurs during loading or the main transport, the buyer bears the risk and must handle insurance or claims.

Early Risk Transfer

Risk transfers to the buyer at the port, not after loading or departure. If the goods are damaged after being placed alongside the ship but before loading, the buyer is still responsible.

Risk of Disputes

Disagreements may arise if the loading process is unclear or if issues occur during shipping. It’s crucial to define in the contract who handles loading, inspections, and documentation.

Example of FAS in Practice

A wine producer in France sells bulk wine to a distributor in the United States. The agreed Incoterm is FAS – Port of Marseille.
The seller delivers the wine in barrels to the Marseille port and places them alongside the vessel. From that moment, the buyer handles the loading, sea freight to New York, and customs clearance.

Summary Free alongside Ship

Transport Mode: Maritime (sea or inland waterway only)
Seller Obligation: Deliver goods alongside the ship at named port
Buyer Obligation: Handle loading, main carriage, insurance, import
Risk Transfers: When goods are placed alongside the ship
Best For: Buyers who want control over ocean freight and logistics

In summary, FAS provides a clear transfer of risk and is suitable for buyers seeking control over transportation logistics. However, sellers have limited responsibility after the goods are placed alongside the ship. Careful communication and a well-drafted contract are essential to ensure a smooth FAS transaction and avoid potential disputes.

Do you frequently require goods to be transported in short sea of ocean freight, either as seller or as buyer? If you would like to discuss which Incoterms® and transport solution fit best to your case,

Need Help Choosing the Right Incoterm®?

Do you frequently import or export goods via sea freight?
Are you unsure which Incoterm best suits your business?

Contact our logistics experts for personalized advice on Incoterms® and optimal transport solutions.

What does FAS stand for? FAS stands for Free Alongside Ship – meaning the seller delivers goods…

CIF Incoterm® (Cost, Insurance and Freight)

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CFR Incoterm® (Cost And Freight)

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