The right logistics can allow your company to scale correctly. When you outsource logistics, there are many benefits for your business. You can streamline processes and focus on growing your revenue rather than managing expenses.
Third party logistics providers are experts in their fields. They can help you manage your company’s logistics, handling all the responsibilities. There are numerous clear advantages of outsourcing logistics. Here is how to gauge whether outsourcing logistics benefits your company’s objectives.
Reduce Logistics Costs
Roughly 3 in every four companies who outsource logistics see a reduction in their overall supply chain and logistics costs. Self-managing logistics, you are constantly dealing with variable costs depending on distribution volume. When logistics is outsourced, your costs are tied to your revenues and are converted into a fixed cost.
Improve Delivery Standards
Every 9 in 10 companies using a third-party logistics firm see improved customer delivery service. This means better quality logistics for you and your clients and doing right by all stakeholders involved.
Tap Into A Network Of Services
Logistics companies vary in what they offer. However, many provide a surprisingly diverse collection of services. Access a large network of facilities regionally, nationally, or worldwide.
Have warehousing, inventory management, customs clearance, international freight forwarding, domestic transportation, and more all under one company that can optimize each business area. Tap into a staff specially trained in order fulfillment, further reducing the complexity of supply chain management.
The primary benefit of outsourcing logistics is that these third parties use the best systems for warehousing and transportation management. They employ best practices every step of the way and are prepared to handle unexpected circumstances in a way the average business isn’t.
There is no need to experiment and try different processes and systems, as you will already use the most optimized option.
See Analytics Reports
Third-party logistics services are transparent about how they operate. Get real-time visibility. See sophisticated reports. As a business owner, you can see all sorts of tracking info in real-time: shipping statuses, order information, and a wide array of customer data.
This allows you to keep yourself informed about overall logistics performance. This information can also be used to relay to customers the status of their order, automated with email software.
You Are Still In Control
You can still have as much control over the logistics process when outsourcing. Direct your logistics company according to how you want it run. Consider your third-party logistics hire a true partner in how your business is run from a service delivery standpoint.
You Don’t Have To Learn
When you outsource logistics, it means you don’t need to learn new software or systems. While it’s not necessarily bad if you take the time to learn, it saves time, money, and effort when you, as a business owner, do not have to do that.
Focus On Your Core Business
No business owner can micro-manage everything top-to-bottom at their company. A supply chain is highly sophisticated, with a lot of moving parts. When you set up outsourcing logistics, you free up time to commit to running your business and pursuing your true passion, doing what you do best. In contrast, logistics experts handle this side of service delivery.
No Infrastructure Investments
If you are just beginning your journey in business, you don’t need to set up the infrastructure or pull together individual components to make up your total logistics plan. The infrastructure, buildings, and systems are already there, ready to be optioned in your favour.
No Buying Equipment Or Resources
In addition to not having to invest in developing your infrastructure, using a third-party logistics service means you don’t need to buy a fleet of delivery trucks or warehouse equipment, have to hire drivers, and/or have to educate yourself on safety, compliance, and liability.
Quickly Set Up In New Territories
Moving into a new sales territory, you don’t need to build distribution capability. By hiring a third-party logistics provider, you already have the systems readily accessible without further work.
Reduce Liability In Operations
When you outsource logistics, you’re also outsourcing any liability relating to said logistics. Your carrier assumes all responsibility, meaning you don’t need to concern yourself with workers’ compensation, physical damage liability, or health and safety standards.
Receive Substantial Delivery Discounts
Many third-party logistics companies can offer discounted rates to move freight because of the volume they do. This can help reduce your shipping on behalf of the company, which is cost savings you can, in turn, pass down to your customers.
Scale Up With Ease
If you know demand increases at a certain time of year – i.e. Black Friday through to the holidays – a third-party logistics service provider is prepared to scale up without you having to do anything. Address volume spikes without any burden placed on you.
Meet aggressive deadlines if there are above-average demands placed on you by the amount of orders received or by individual suppliers, partners, or customers.