Why You Should Outsource Your Business's Logistic Functions

With so many extremely successful companies choosing to outsource logistic functions, it is pretty clear that it is an effective strategy for increasing efficiency, reducing costs and improving business as a whole. However, the specific reasons behind these improvements are complex. Listed below are some of the benefits to outsource logistics functions of business to teach you how outsourcing logistics can help your company.

1. Increase Focus on Business Mission

Delegating logistics to others lets you focus your time and attention on improving your business. Whether that means improving your good or service, developing your brand and marketing strategy or increasing employee or customer satisfaction, you will have more time to dedicate to developing your business. outsource logistics your business’s logistics to trained professionals who know the most efficient ways to accomplish what you need them to will save you plenty of time (and probably a headache, too).

2. 3PLs Have Significant Negotiating Power

Shipping and transportation costs can be exorbitant for businesses to manage on their own, especially if transportation companies have no incentive to reduce costs. Individual businesses sometimes end up paying the highest price per unit when it comes to transportation. Because 3PLs manage shipping and transportation for so many people, however, they hold a lot of bargaining power with transportation companies. They can leverage their sheer volume of business to get transportation companies to lower costs or offer them deals, therefore reducing overall transportation costs.

3. Reduction of Costs

This topic was partially touched on in the previous point, as negotiating power can reduce transportation costs. However, there are plenty of other ways that 3PLs can reduce costs of managing logistics for businesses. They have vast knowledge and experience with logistics to rely on, and many companies lack that expertise. 3PLs know all the tricks of the trade.

They utilize postal work-share opportunities that let them cut costs, such as presorting and drop-shipping. outsource logistics also means that businesses do not have to worry about hiring qualified employees for logistic management, which can be quite expensive. 3PLs hire the most efficient employees, so that you do not have to.

4. Access to Technology That Increases Efficiency

With the costs of managing logistics being so high for individual companies, many cannot pay for additional technology that would help increase efficiency and cost-effectiveness. 3PLs, however, have the resources to invest in technology that can help optimize transportation, reduce costs and ensure all regulations are being met. This technology is frequently known as transportation management system (TMS) software.

3PLs use this software to increase client satisfaction and save money for those clients. Software can also document plenty of data for businesses in order to gain insight into their business model and products.

5. Optimization at Unprecedented Levels

For 3PLs, optimization is the name of the game. There are individuals and teams entirely dedicated to overseeing and analyzing strategies used for management of logistics. These people are constantly on the lookout for areas of improvement and places to increase efficiency, and their experience makes them well-qualified to do so. They have the time and knowledge of the field that many companies seem to lack.

They take any changes in the supply industry in a stride because it is their job to handle minor changes or disruptions. These same disruptions could cost a company lots of time, money and manpower trying to solve it.

6. Transparency and Control

Companies in the business of managing logistics value collaboration, honesty and transparency. While 3PLs bear the brunt of the burden when it comes to managing logistics, they are not over-controlling. 3PLs strive to work alongside their clients to ensure that they are meeting all of the needs of their clients. They will willingly hand over any logistic data that you may need or want to see.

The documentation of all data also creates a sense of transparency. Both clients and customers of clients gain significant insight into the inner workings and timelines of transportation and other logistical functions. 3PLs are used to working with people and highly value the input and opinions of clients, holding themselves to a high standard of honesty, visibility and accountability.

7. Reduced Liability

Businesses that oversee all logistical functions have a huge responsibility to get it right every single time. Running a business and trying to manage fees, costs and transportation would be a lot on anyone’s plate, and at a certain point, there is bound to be a minor fluke. Businesses that do not outsource logistics have to absorb the costs and criticism of any minor mishaps that may happen along the long, tedious chain of supply.

Handing the responsibility over to 3PLs means that businesses can relax and not worry about that anymore. 3PLs assume responsibility for anything that may go wrong in all logistical functions that they manage. This means that 3PLs cover the cost and take accountability for any mistakes, so businesses can relax a bit and focus on their business.

8. Improved Customer Satisfaction

In an increasingly competitive market with more and more options available to customers, maximizing customer satisfaction is increasingly important. outsource logistics can improve customer satisfaction by reducing shipping costs and fees along with reducing shipping time.

Customers expect to receive their products quickly in today’s fast-paced environment, and shipping time can be a significant factor that plays into their decision of who to give their business to. To keep up with high expectations, many 3PLs can offer next-day or 2-day delivery at little to no extra cost for customers.

The benefits listed above are only some of the numerous benefits of outsource logistics. Delegating transportation and logistical responsibilities to an experienced third party can improve your service, cut costs and give you more time to focus on the business you are passionate about.