The Case For Outsourcing Logistics
You have the product. Should you outsource its delivery? In this article, we’ll examine the reasons why outsourcing logistics may be one of your best business decisions. Decide which of these points apply to you, talk to local logistics companies, and make the call! Here’s why using your own fleet might not be the cost-saver you thought it would be.
1. Making a Delivery Run Break Even isn’t Easy
Most businesses who handle their own logistics struggle to profit from this aspect of their business. In fact, breaking even is often all they can hope for while making a loss is a real possibility. Customer expectations have a big role to play. Texas couriers are among the logistics experts who have noticed the growing demand for same-day delivery. Can you achieve this without covering the cost out of your profits? A logistics specialist will be better able to combine its clients’ delivery needs for a worthwhile delivery run.
2. Managing a Fleet is Intensive Work
If you’ve ever tried to run a delivery fleet, you’ll know about the midnight calls from stranded drivers with mechanical breakdowns. You’ll know about the hours spent planning delivery routes and trying to get your vehicles dispatched with a full load. You’ll also be aware of the problems associated with managing staff on the road and the fleet management regulations you have to navigate. It’s a full-time-plus job, and it may not give you any returns to speak of. Should you be spending your energy on logistics when your core business requires your attention? Probably not!
3. Even the Biggest Companies Outsource Logistics
Have you ever wondered why big businesses that can afford entire departments dedicated to functions you have to multitask to handle still outsource logistics? The answer is simple. They find it more cost-effective than trying to do it themselves. Having an entire department dedicated to a support function can work in some instances, but a logistics function is best handled by companies that see it as a core business.
4. Fleets are Cost and Capital-Intensive
Your business capital only goes so far. How will you prioritize the areas in which you should invest? Ideally, your resources should go towards advances in your field of business. If that field isn’t logistics, it’s not a good place to invest your money. The best delivery fleet you can afford isn’t going to improve the product it delivers, and since the product is what you profit from most, it’s the best area to invest in. Running a fleet isn’t cheap. Should you be pouring money into yours?
5. Demand Fluctuates: Your Fleet Doesn’t
There’s one last thing to consider in this typical “make-or buy” decision. Demand isn’t constant. Your peak season sees the biggest demand for your logistics service. If it’s geared to meet that demand, there will be times when it’s unproductive. You’ll have idle vehicles and staff to redeploy or dispense with. If it isn’t geared for peak demand, logistics could become a reputation-management issue you’ll struggle to deal with. As a solution, you might look to outsource during your peak season only, or you might just decide that it’s more productive to outsource logistics in its entirety.
Doing Everything In-House Can be Costly
Deciding to do as much as possible in house might look like a good decision, but before you decide to do it, you should crunch the numbers. While there may be benefits to controlling every aspect of your business in-house, this option has its costs, and those costs could be higher than you expected. Logistics is among the areas where costs can easily outweigh benefits when attempting a DIY solution. Consider developing a strong relationship with a logistics provider in your area. The costs are predictable, and the results are very often better!