Many businesses want to maximize their profits by limiting how much they spend. Outsourcing certain business functions, such as logistics operations, has many benefits including lowering costs. Outsourcing also allows your company to focus on its core aspects of the business while leaving logistics and transportation to the experts. Companies then can easily scale operations to meet the changing demands of their business, which is important in today’s changing industry.
When to Outsource Logistics Operations
Smaller companies are often able to handle their shipping needs internally when first starting out. However, over time, an increase in shipping volume means a more complicated process with higher labor costs, additional warehouses or distribution centers, and the need for more vehicles and equipment. Usually, businesses that utilize outsourcing hire a third-party logistics provider (3PL) to handle their operations when they find they have grown too much to handle it on their own.
Benefits of Outsourcing Logistics Operations
Businesses choose to outsource for the following benefits:
- Lower Costs
Labor costs decrease when logistics operations are handled by a third party. Logistics can be time-consuming, which means that as your business grows, you will have to hire more employees to handle shipping. Outsourcing shipping services leads to a reduction in payroll costs. And when you outsource, you save on investment in infrastructure, new technology, and other resources that are needed to handle these operations in-house.
- Higher Level of Customer Satisfaction
Customer satisfaction is important to every business. A poor experience can prevent customers from purchasing from you in the future, especially when it happens during fulfillment or shipping. Managing and shipping orders can be a challenge while running all other aspects of a business. A subpar shipping experience can create a negative connotation for a customer in addition to costly chargebacks or lost sales.
- Allows More Time to Be Spent on Your Business
Logistics can be a complicated and time-consuming endeavor, which can take away from other aspects of running a company. It is important, then, to focus on your core competencies and hire shipping experts to take care of that area. Using a logistics provider allows you to spend time growing your business, and not worrying about logistics challenges. This leads to faster growth potential and better results for your customers.
- Increased Efficiency
Outsourcing allows for the movement of certain functions to more specialized sources. For example, most companies are not able to handle a fleet of vehicles efficiently, but a 3PL has the expertise to manage a fleet and how to best get a shipment to its final destination. Shifting functions to a 3PL that specializes in logistics leads to higher productivity, efficiency, and cost-effectiveness.
- Access to Better Technology and Other Resources
The logistics industry has been adopting technological advancements quickly over the last few years, and now options such as same-day delivery and real-time tracking are mainstays in the industry. As customers expect more from their shipping experiences, keeping up with innovations can be difficult. New technology, trends, and best practices are continually emerging. An experienced 3PL will have greater access to new technological advances, which will directly benefit your shipping operations and your customers. Software such as TMS (Transportation Management Systems) and supply chain visibility platforms can help make better decisions and take your shipping process to the next level.
- Minimize Risk
Outsourcing can improve risk management as logistics providers have more experience handling risks and can minimize supply chain disruptions. They have access to additional tools, resources, and labor to minimize the impact of supply chain disruptions while reducing the risk of theft, damage, and loss.
- Variety of Shipping Options
Third-party logistics providers often have a larger network to be able to pull from. Outsourcing logistics gives you a greater variety of shipping options, such as same-day or next-day delivery as well as guaranteed delivery by a certain time. Using a 3PL can give faster and more flexible delivery times, as they have a greater carrier network.
Your Trusted Partner
When your company chooses to outsource transportation to an experienced 3PL like Red Arrow Logistics, you will get the benefit of working with a company that is an expert in logistics. Our streamlined logistics network can offer your customers the best delivery options at the best prices so you can focus on what you do best.
Red Arrow offers the scale and scope of services including air, ocean, and ground transportation to meet the budget and schedule requirements of the largest and smallest companies alike. If we can be of assistance, please email us at email@example.com or give us a call at 425-747-7914.