If you are familiar with how companies have started moving much of their software online in order to take advantage of the cloud, you will likely be surprised at some of the parallels that exist in the logistic and shipping industry.
Not only is it becoming difficult to compete on price with focused businesses that offer worldwide freight options by using an in-house effort, it is also tough to end up providing the same level of service as some of the larger groupings.
Here are 4 of the benefits of outsourcing logistics and freight:
Your team can focus on quality:
Whether you have a small or large manufacturing facility or warehouse, staging and loading shipping containers and LCLs is one area that is often under-scrutinized. By refocusing your team that was working on logistics, you can add duties like shipping and receiving quality efforts that ensure that your freight is always perfect when it leaves your building. The benefits are an enhanced reputation with your customers and a cost savings. Prestige Worldwide Logistics said, “You will likely save money by outsourcing and the reallocation of quality awareness should shrink claims.”
Range:
If you would like to expand your customer base by extending the regions that you serve, it is hard to do so when you are waiting for your logistics department to create the necessary relationships that will allow you to use new operators to deliver your freight in those areas. When you outsource, you will likely be tapping into a company that has spent its money building a regional or global network of logistic people and operators. You no longer need to vet your operators at the same level as you do when you keep that functionality in-house because they have already passed many of the same quality tests that you would be providing them with.
You already share duties:
With the advent of internet logistics, the large operators can arrange for LCL quotations and scheduling instantly. Even if you are doing most of your freight arrangement in-house, you are likely using these streamlined systems that can make some of the work that you do redundant. Celebrate the redundancies and re-focus your team in other directions that add value.
Freight benefits will accrue:
The concept of freight benefits for many firms is the notion that the more efficient that the logistics and operations get, the lower the costs become and the better the system is. There are a few levels of benefits that can accrue to a firm. One of the best ways of showing how those benefits can impact you directly is to look at your relationship with a broker that you outsource to. You know that it is unlikely that you will be able to match the rates that they can provide you with online. So by letting them save you time and money, it allows you to look at other areas that you can streamline, often saving you even more money. Another way that you can look at it is to take the cost that they are quoting you for freight insurance and compare that to what you would pay under your own policy if you were to offer protection to your clients through your own shipping insurance. Again, their scale makes it somewhat prohibitive for most companies to keep that type of service in-house. Instead, shipping staff can create ways of analyzing the outsourcing companies that you do use to determine who provides the most return on investment over time.
Leveraging technology in shipping has moved into the cloud and the real current winner is the savvy shipper that understands precisely what requirements will lead to better performance for their clients. The more money that you save by outsourcing, the more benefit you will end up with.
