The outsourcing of construction site logistics to a competent partner can easily save 10–30% of logistics costs. It will also take the productivity of work to the next level.
The sharp rise in costs is forcing companies to seek new ways of ensuring the profitability of ongoing and future construction projects. One such way is the outsourcing of logistics, which saves costs and changes fixed construction site costs to variable costs.
“Efficient construction site logistics brings cost savings of at least 10–30% compared to the same work performed without proper planning,” says Juho Lappalainen, who manages the Construction Logistics service at Transval.
In reality, the cost benefits achieved are often even greater than this, as properly planned and organized logistics significantly improves the efficiency of construction site operations. Material delivery delays and waiting times are eliminated, lead times are shortened, the quality of work is improved and materials are saved.
“Cost transparency helps contractors get an accurate picture of logistics costs right from the start of the project. They will then be easier to track and control as the project progresses,” says Juho Lappalainen, who manages the Construction Logistics service.
Transparent pricing is based on performances
In addition to the management of the in-house logistics of the construction site, our construction logistics services include transport-related services and warehousing. We plan the deliveries and carry-ins of products and time them precisely according to the site’s schedules. This allows the supervisors to focus on their core work: site management.
“At the same time, there’s no need to acquire additional manpower to move the goods around, nor a need to have work done at the higher hourly rates of contractors. This results in significant savings,” Lappalainen points out.
Instead of charging by the hour, our services are mainly priced on an accrual basis. We have set a standard price for all the most common performances, from transport to warehousing and carry-ins, whether we are talking about furniture, household appliances, interior doors, tiles or drywall.
“It’s possible to change as much as 40% or more of fixed logistics costs to variable costs, which also reduces the total costs. Cost transparency helps contractors get an accurate picture of logistics costs right from the start of the project. They will then be easier to track and control as the project progresses.”
Intermediate storage has many advantages
Our operating model based on intermediate storage ensures good storage conditions for construction materials. They do not have to be kept at the construction site under tarpaulins at the mercy of autumn rains or snowfall; instead, the goods stored in optimal conditions are delivered to the agreed place at the site at the agreed time.
“The goods are also unloaded and carried in swiftly and safely when the work is performed by competent logistics professionals with the right tools,” Lappalainen says.
Our operating model enables efficient combining of transports. Several smaller deliveries can be combined with loads arriving from immediate storage, which reduces costs and traffic at the construction site. It is not profitable for the supplier to deliver small batches to the site either. Costs are saved when suppliers can transport full loads to the intermediate storage, from where the products are delivered to the site in combined loads.
“That’s why suppliers are also making increasing use of our warehousing and other logistics services.”
Smooth logistics minimizes disruptions
With regard to profitability, it is crucial that the construction project can be completed within the planned schedule.
“Every project should stay on budget and schedule on paper. In reality, even a small disruption adds to the costs, as delays cause rush fees and employees have to work overtime to catch up with the schedules. Fleet rents and the site’s heating costs are always running, too.”
Smooth logistics plays a crucial role in the progress of work. Intermediate storage of construction materials provides a way to minimize disruptions.
“The goods are ready in the warehouse waiting if the site’s schedules change for one reason or another and the delivery needs to be rescheduled.”
Interested? Contact us if you want to improve the efficiency of your construction business!
DID YOU KNOW THIS ABOUT TRANSVAL?
- The market leader in logistics outsourcing in Finland and the largest in-house logistics company in the Nordic Region. A company fully owned by Posti Group.
- The services include warehousing and in-house logistics solutions, industrial logistics, store logistics, construction logistics and temporary staffing in logistics.
- The company employs more than 5,000 logistics professionals.
- 320,000 square meters of warehouse space in Finland.