An Woman Explaining the Total Cost of Ownership in a Meeting

4 Simple Ways to Reduce Total Cost of Ownership (TCO) of Logistics Companies

With businesses worldwide moving to trade online due to the digital boom, many logistics companies have never been in such high demand. To adapt to the new world, freight forwarding and logistics companies rely more on cutting-edge technology to drive competencies and stay ahead of the competition. Having the right tools in place is critical, as is optimizing the actual total cost of ownership (TCO) for better business growth.

Before we jump into finding solutions for reducing the TCO of digital solutions for your logistics business, let’s thoroughly understand it and why it’s essential for making more informed decisions.

What is the Total Cost of Ownership (TCO)?

The Total Cost of Ownership (TCO) is an analysis that calculates the hidden costs beyond the price and puts a single value on the complete life cycle of any tool purchased. It’s a value that includes every stage of ownership: purchase, implementation, integration, operation, and training.

Hence, it offers a more precise foundation for estimating the total value of an investment than the acquisition amount alone. In short, TCO includes all direct and indirect expenses related to using digital systems and other intangible overheads that may be allocated a monetary value.

Logistics industry personnel can facilitate the TCO analysis by merging their extensive analytical skills with other team members’ insights to ensure that they consider all the relevant costs to get accurate results.

Why is TCO Important for Logistics Businesses?

Measuring the total cost of ownership (TCO) is like looking at not just the visible tip of the iceberg but its entirety. The industry is aware of the visible part – product price, taxes, and implementation. But when it comes to operating the tools for better efficiency and integration with different processes, the costs can often multiply quicker than one can realize.

All these related costs go undetected until you look underwater into the depths. To that end, a logistics company must evaluate the TCO for better decision-making and growth. Accurate TCO leads to higher performance, productivity, return on investment (ROI), and a more consolidated future strategy.

Once you have the correct TCO analysis, it’s time to find the solutions to reduce it for the highest possible return on investment (ROI)

What are the 4 Ways to Bring Down the TCO?

Concerning freight forwarding, change is inevitable in today’s world. Due to the current economic situation, many logistics companies will have to lower costs or start thinking about outsourcing some tasks. Bringing down the TCO can lift some cost burdens for more efficient financial management.

You can reduce the TCO of a logistics company in the following ways:

1. Automation Reduces Costs

Automation in the freight forwarding company helps streamline the company’s activities. It, in turn, allows the top-tier management and sales personnel to focus more on revenue generation and increase ROIs.

There are more routine tasks than one can imagine in a company throughout the day. Companies can optimize human resources by automating back-office operations such as emails or making calls to track freight.

Using automation for customer touchpoints for repetitive tasks, allowing human resources to make decisions for core business and growth. It will increase the quality of interactions and also reduce the costs of administration and customer experience. 

2. Governance Model for Digital Excellence

Governance of data ensures that the processes and the data are well-integrated, secure, usable, and readily available to use and implement. It helps the company that all the resources are in-sync with the goals, dependable, and not misused in any way which may harm the company.

More so for logistics companies that face intense digital pressure and must comply with protection and safety regulations. Using the governance model helps to reduce TCO seamlessly running the operations and generate a greater return of processes, data, and people.

3. Reducing Integration Costs

Integration of technologies takes a lot of time and effort, not to mention money. More time and effort also translate to an increase in the TCO, especially when running a logistics company. Any stage in a logistics supply chain process should work seamlessly and on time to avoid delays in the movement of goods.

Essentially, API integration improves the workflow and efficiency of supply chain processes manifold. As a result, it brings down your TCO by aiding better collaboration between all the sales, operations, and back-office teams.

4. Empowering People

It’s no secret that trained and versed employees are more productive and cause fewer disruptions. Using digital tools makes communicating with customers, colleagues, and partners easy and quick. However, it’s all in vain if you aren’t training employees on how to use these tools effectively.

Empowering your people effectively to become accustomed to digital tools drastically reduces operational and other related costs.

How Can Networcx Help You Reduce the TCO of Your Logistics Company?

Networcx is at the forefront of the trade-in providing holistic solutions for the forwarding and logistics industry. With more than 20 years of experience in the industry, we know the ins and outs of logistics and transportation by heart. Moreover, we understand interactions between employees, sales, products (transport modes), and operations.

Knowing how the COVID-19 pandemic and other global risks have the potential to turn the logistics sector on its head is essential. With the added strain, outsourcing the services and finding ways to get past it is the only way to survive in this cutthroat industry. By that token, you can take steps to select the right tools and reduce the TCO with Networcx.

How can we make it all possible? Some of the highlights of using the Networcx solution are:

1. Automated and Digital Workflows

Networcx offers drag and drop tool to set up an unlimited number of automated workflows with necessary workflow variables and values. This feature helps to improve performance and quality while minimizing costs and time by having faster, more efficient processes. A technology that does the job of manual labor helps reduce the amount of unnecessary work in your organization, enabling you to reduce costs.

2. Powerful Analytics

Networcx provides powerful analytics with built-in intelligence. Benefit from our intelligent data solution that turns your data into facts and knowledge. Find out useful, actionable insights to reduce the total cost of ownership with our state-of-the-art analytics, dashboards, and more.

3. Customized Already

Networcx ensures that all the underlying processes get customized for the logistics industry. You don’t need to purchase tools that offer unnecessary functionalities unrelated to your domain. It means you won’t shell out 100% of the cost when only 30% of the features are usable.

4. Seamless Integrations

You can connect and integrate your business and customer data with additional applications with the help of Networcx integration. It gives you the ability to view each platform’s integrated data in unified views in real-time, whether the data come from the CRM, ERP, or other sources.

5. Industry-Focused Solutions

Networcx’s all 360-degree application was developed with a logic and data management focus on freight forwarding and logistics processes. It can help you seamlessly improve the business’s collaboration, automation, and productivity.

6. Experienced Supervision

All people of Networcx have field experience and have worked in the logistics industry. They know the same language and have faced the same problems as you face daily. It helps to save you the hassles and money.

Our expert team comprises professionals with years of experience in their respective areas linked to fully integrated freight forwarding and logistics standards.

7. Avail the Best Standards

Due to our extensive experience in the industry and access to industry best practices and benchmarks, we offer the best solutions for the management and operations of your business at minimal costs. Moreover, as a forwarder, you can streamline your work by making data available to all the team members and customers when needed.

8. No External Team is Required

Networcx implements all its tools having no external implementation partner. Consequently, it shuns the extra costs, reduces extra effort, and prevents any finger-pointing leading to the smooth functioning of the business with reduced TCO.

9. Reduced Implementation Costs

Our freight forwarding software is already customized to fulfill the needs of your logistics and freight forwarding business. With the help of the governance model, we ensure robust and compliant execution of processes, data, and people interactions.

Subsequently, it translates to reduced costs on implementation paid to different people in the company for training, software integration, and communication.

10. Flexible Prices

We offer a comprehensive range of modules that are fully integrated and can be purchased flexibly depending on your CRM requirements and approach.

So, instead of paying for our all-in-one solution, you can also subscribe to our particular modules that suit your requirement. Again, it spares you from spending money on worthless features and getting the best ROI.


Economic pressure is forcing companies to reduce the TCO and look for external solutions. Reducing the Total Cost of Ownership is among the best tactical tools decision-makers use to guarantee better returns. Moreover, it is no longer an option for logistic companies but rather a necessity. You can achieve this reduction by calculating the TCO and then using the above strategies.

Networcx can help you there. We will assist you in reducing the Total Cost of Ownership, optimizing logistics business output, and instantly overcoming compliance issues. 

Digitizing your business with the lowest TCO value has never been this easy. Whether you’re a new venture or a seasoned logistics company, Networcx’s tools and modules are well-suited for all your needs.

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