With the boom in deliveries, logistics is taking up more and more room inside companies. It is complex work, but essential to growth, and the question of outsourcing it comes up for plenty of managers. Outsourcing logistics is becoming more and more common, yet taking the step can bring doubts and fears with it. Does logistics outsourcing suit every company? How do you go about it? And what are the benefits that make it worth doing? This article works through those questions. One thing is certain: logistics outsourcing will hold no more secrets for you.
What is logistics outsourcing?
Outsourcing¹ your logistics means handing all or part of that work to an external logistics provider. It can cover stock management, order picking or the delivery of parcels. You delegate part of your operation to an expert with specific skills in the field. That partner has to be one you trust, because they become a key part of your day-to-day business.
When should you outsource your logistics?
Every company is different, so there is no single right moment to outsource your logistics. The question tends to come up when a company runs into certain situations. For example:
- to fill a gap in expertise
- to save time
- to be more flexible
- to gain reliability
- etc.
Why outsource your logistics?
Focus on your core business
Outsourcing your logistics gives you back time for your core business. The provider takes the whole weight of logistics management off your hands. Companies live in a constant whirl of performance and optimisation, and running everything at once is hard. Time runs short, so being responsive is out of the question. Bringing in an outside provider frees you from day-to-day management and execution, and from every constraint that comes with them. Your internal teams can then focus on their own work instead of spreading themselves thin. The problems no longer land on them directly and are solved instead by providers who do this for a living.
Benefit from an external provider’s expertise
Outsourcing all or part of your supply chain gives you the provider’s expertise. Delivery is usually the last step in the process, and often the most critical. When it fails, your reputation and your operations both suffer. Outsourcing that crucial part lets you guarantee a professional response: as a specialist in its own field, a logistics provider has complete command of the work.You also benefit from the innovation going on in the sector. Constantly on the lookout for the latest technology and watching its market, an external provider passes on the newest tools and logistics advances.
Gain flexibility and operational agility
Another advantage of working with an external provider is that you are free to stop subcontracting at any time. Since you pay for the services you ask for, you can end the contract whenever you want.
Outsourcing your logistics also lets you absorb peaks in activity at pivotal times such as the holidays. Having a logistics provider take on those swings in volume is key.
In house, procedures set in advance can bring a degree of rigidity. In a market where customers want hyper-personalisation, that rigidity can be critical for your business.
With their know-how and their resources, the provider knows how to adapt to those swings. They take on the outsourced work and answer customer needs precisely. Logistics outsourcing brings responsive, bespoke service.
And you can offer your customers a range of delivery options that is far more complete thanks to your external provider. By offering many different kinds of delivery (express, delivery rounds, refrigerated transport and so on) you can satisfy everything your customers ask for.
Get support as your business grows
Once you start outsourcing your logistics, the provider becomes a genuine partner. You get support at every stage and across every logistics process. Growing continuously alongside you, your logistics partner offers solutions that answer your needs. And it will develop those solutions as your business expands.
Get access to leading-edge logistics technology
Logistics is a sector in constant motion. Innovations and technologies keep appearing to help companies optimise their logistics. Investing in them in house takes a serious budget and is not always within reach, particularly for smaller companies. Outsourcing lets you benefit from the investment your provider has already made.
Reduce the risk to your staff and your business
Finally, outsourcing lets companies cut not only their labour risk but their financial risk. Because your external provider has its own fleet and its own software, you avoid the risk of investing in transport or logistics management equipment that may not suit your business or do what you need. Carriers’ experience also means they take no chances when moving pallets, for example. They know exactly how to place, carry and handle them so that nothing goes wrong.
How do you outsource your logistics effectively?
Before you go for outsourcing, you need a business plan setting out the objectives, the terms and the ways you will monitor them. The decision to outsource your logistics has to be thought through and in line with your company’s goals. Outsourcing therefore goes through 4 main phases:
- Study your needs closely and build your project
- Choose a professional, rigorous external provider you can build a relationship of trust with. Take your time over the choice, to see whether they answer your needs.
- Agree a shared vision and shared working processes. You have to be completely aligned and know exactly where you are heading. Real working symbiosis is what builds an effective commercial relationship.
- Put reporting and performance indicators in place so you can assess the partnership continuously.
Logistics outsourcing: a strategic choice
Logistics outsourcing has undeniable advantages. It is also a strongly strategic choice. Where it answers a gap in expertise or in flexibility, the point is to find an external provider who meets all your needs. Build a relationship of trust with them and they become a genuine partner and an undeniable asset. Expertise, professionalism, flexibility, bespoke delivery options … those are all advantages Shippr offers you. And we do not stop there. To discover everything we offer and talk through your needs in detail, get in touch with one of our business experts.¹ Outsource: to entrust a task or an activity to an outside company. Synonym: subcontract
