I have schema with transaction replication which has multiple publishers and
one subscriber. And I want to minimize traffic. One way which I see is usage
of hardware compression on Cisco routers.
Are any other ways to reduce network traffic used by transaction
replication? May be with usage of some setting in replication?
How different values in log reader/distribution profiles may affect it? How
location of distributor may affect it?

In a sense I think the premise of the question is incorrect. There is a need
to replicate transactions in transactional replication, and no profile
changes will alter the amount of changes, and hence the amount of network
traffic. One possibility is to schedule the agents to suit network needs eg
during the evening, lunchtime etc. Another posibility is to replicate the
execution of stored procedures rather than the actual row transformations.
Cheers,
Paul Ibison SQL Server MVP, www.replicationanswers.com