The vast majority of companies have logistics operators who help them totally or partially in their supply chain. However, the decision to hire logistics and transportation companies remains one of the most important for companies. What is it that leads companies to entrust their logistics to third parties? What are your competitors looking for doing it?
Logistics and transport companies offer a wide range of services (storage, order preparation, distribution, etc.) to make life easier for their customers. In addition, a good logistics operator will draw up a transition plan for those clients who want to make the leap to outsourcing to do so easily. We are going to review some of the main advantages why putting yourself in the hands of logistics operators can be a good idea for your company and from which you may not be benefiting yet.
Advantages of hiring logistics and transport companies
1.- It allows you to focus on your specialty
In a world as competitive as the current one, it is already difficult enough to be able to stand out in one sector as to have to spend our energy in another. For many companies, having to take care of their logistics is a distraction from the true core of their business, from what makes them special and what gets their customers’ attention.
Although there are companies that have managed to become logistics monsters, for many others the logistics part ends up becoming a nuisance for the rest of their processes and they fail to achieve the quality levels that logistics and transport companies would offer them.
2.- Best technology at your disposal
Logistics operators live exclusively by providing logistics services to our customers. That is why it is essential for us to have the most advanced technological systems. Warehouse Management Systems, merchandise traceability programs, efficient vehicles in their performance and benefits, aid systems in order preparation and picking, etc.
However, for companies it is often more difficult to face these investments. Companies tend to prioritize spending on investments that directly affect how their product is manufactured, in addition to having less logistical movement than an operator, making it more difficult for them to make investments in the supply chain profitable.
3.- Greater customer satisfaction
The two previous points already give us an idea of how you can improve the experience of our customers. If, on the one hand, we focus on better serving the core of our business and, on the other, we improve the logistics service, customers will soon begin to notice this leap in quality.
4.- Continuous improvement
We have already commented on the greater facility that logistics and transport companies have to invest in their work tools. While companies often try to “comply” with their logistics and find it difficult to go beyond that point, logistics operators are used to continually rethinking their processes to improve them. New routes, redesign of operations, new ways of working, improvements in work tools, etc.
5.- Take advantage of the economy of scale
The economy of scale is that it requires less cost to do the same thing many times than to do it fewer times. In other words, while your own logistics may have to move a vehicle without filling it to make a delivery or fail to have a high warehouse occupancy, logistics operators take advantage of the synergies created by working with several clients at the same time. If you can’t fill a trailer from Madrid to Barcelona, let us do it for you.
6.- Control your logistics better
Although at first it may seem contradictory, giving up your logistics can be the first step to have better control and knowledge about it. When companies have very tight resources to move their logistics forward, it is rare that they can also stop at obtaining their own performance indicators.
When you decide to take the step of outsourcing your logistics, you can establish with the logistics and transport companies what ratios you want to know, what data you need and see how they inform you about them over time. In short, you will be able to know your logistics better than when you did it directly.
7.- Facilitate legal issues
Logistics and transport are complex and constantly evolving worlds, so it is not easy to keep up to date with all the regulations involved. Once again, it is much easier for logistics operators to be up to date and to be experts in the legal issues that concern them (such as the recent change in stowage regulations). Although this cannot lead you to carelessness either, since the shipper continues to have his parcels of responsibility, it will reduce difficulties.
The important thing is that taking care of your own logistics does not limit your business
8.- Open doors to new markets
Logistics is essential for us to reach the points of sale. And the further we want to go -whether locally, nationally or internationally- the more we will demand of our logistics. Not only in transportation, but perhaps also with the need for proximity distribution centers, new warehouses, etc. Something that may be inaccessible for some companies but much easier for logistics and transport companies. The important thing is that taking care of your own logistics does not limit your business.
9.- Flexibility
The flexibility provided by a logistics operator translates in several ways. One of the most important is the way to deal with seasonal periods, those dates of the year when we have big ups and downs in our volumes. If we take care of our logistics we run the risk of not keeping up with the increase in work and having underutilized resources during the low stretches.
Logistics operators, although they also face the challenge of seasonality, can dilute it among several clients -who have different seasonal times- in addition to being more used to having to react to these changes: hiring suppliers, recruiting staff or even temporarily renting new ones. ships, spaces and machinery.
10.- Tranquility
So far we have focused on very tangible benefits that can be touched and accounted for. However, something as immaterial as peace of mind is deeply rooted among the reasons that lead companies to hire logistics and transport companies.
Logistics, for those companies that are not specialized in it, is not only a source of costs and problems, but also of worries. Finding a logistics partner will not only allow you to focus on what you are best at, but to do so with peace of mind and the confidence of having your back covered with a service that is probably better than what you were able to achieve with your means.
11.- Release internal resources
It may seem obvious, but if you take care of your own logistics you will have to dedicate resources to it. Space, people, machinery, money… Outsourcing these processes allows you to have these resources and free them up, convert fixed costs into variables and have fewer financial resources allocated to the non-central part of your business.
12.- Get immediate experience
Experience is one of the most valuable things in the business world and one of the easiest ways to access it is by hiring it. You can gain the experience firsthand, but that will mean a long, slow path, full of mistakes to learn from. On the contrary, you can go to logistics and transport companies that will put all those years of knowledge and experience to work for you from day one, so that you will get the best of the experience, saving you the troubles and problems along the way.
13.- Network of contacts and resources
Unless you are a giant, surely your network of contacts and resources in the world of logistics will be less than what logistics and transport companies can offer you. They can put at your disposal their collaborators, cargo bags, suppliers (be they transport, machinery, packaging…) with whom you may not have contact. Even in fuel consumption it is possible that they can get better prices. And it is that, once again, experience is a degree.
14.- Costs
One of the most immediate motivations that companies have to carry out their own logistics is the belief that this will save costs. And it is not that it is impossible to achieve it, but as we have seen in this article, there are many factors that make it easier for logistics and transport companies to work more efficiently and offer a better final cost to their customers.
Economies of scale, flexibility, seasonal periods, release of internal and economic resources, savings in investments to be made… They all play in favor of subcontracting being a good option to improve, in addition to your service, your real costs (once you have taken into account all the resources you have to put in place).
Conclusion
When deciding whether to hire an external operator and how many tasks to assign, it cannot be said that there is only one correct decision. However, it is certain that there are powerful reasons for you to consider how you could benefit from doing so (and it is very likely that your competition is doing it). And it is that 90% of the Fortune 500 companies -the largest companies in the United States- use external logistics operators.
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