Why the cost of outsourcing logistics is economical for your business

Outsourcing Logistics

An experienced third party logistics provider will transform your business

If your business delivers goods to your customers, the expense of outsourcing logistics can be huge. It may be tempting to try and take control of some of the costs. You could get rid of your third-party logistics providers (3PL) and invest in vans or lorries of your own, and this could save you some money in the long run.

However, investing in your own logistics solutions also means taking ownership of the transport industry’s growing challenges. And the issues are not obvious at first glance. Confronting these difficulties can mean increased financial costs but can also take focus away from your key business functions. When you do this, you affect growth.

Here are 5 reasons why it’s worth handing over this one area of your business to the experts. Freeing up your time to focus on what matters.

1. Driver costs

A driver is more than a person who simply sits behind the wheel of a vehicle. Maintaining a steady pool of qualified drivers is time consuming. Keeping up to date with training and complying with regulations takes a lot of organisation. Then there is the cost of insurance. All of this adds up to a significant pile of admin and pounds! The growing shortage of drivers in the transport industry is also a big factor. Once you have your new fleet of vans, finding people to drive them may be a bigger problem than you think!


2. Staff costs

You will also have to hire more staff to look after the new logistics section of your business. Or if that is too expensive, you will have to add to the workload of your existing staff. Whether you spend money on staff training, or take time away from your business, will it generate significant savings for your company to be worth it?

Staff time and morale is valuable, and essential for the smooth running of a company. If you have done your sums and you can’t foresee the savings piling up, think how easily you can hand over all of this admin and stress to outsourcing logistics providers who know exactly what they are doing.

3. Capacity constraints

If the size of your deliveries vary greatly, it can be difficult to know what size of van is most economical. If you go large to fit your largest product, it is very uneconomical if you are travelling with small loads. Or if you go small and have occasional large loads you would need to resort to a 3PL anyway.

These kind of idle assets and unfilled loads are expensive and not a good use of fuel economy. The cost of fuel could quickly spiral out of control. You need drivers and logistics managers who are experienced enough to calculate precise routes. You want to be confident that you are able to make the most out of every vehicle and the journey it is taking. The experts at a good 3PL will work hard to plan your routes and keep your costs down.

4. Regulations

Transport regulations in the UK and Europe change regularly. Keeping up to date with it all is a large commitment of time and energy. If you are taking control of your own logistics you cannot afford to misunderstand this area. Drivers can incur sizeable penalties if they don’t comply.

5. Vehicle maintenance

With the number of miles that vehicles clock up on the road it is inevitable that break downs occur. This can contribute heavily to your business costs, and affect your customers’ experience if their goods do not arrive on time. You need to have a sophisticated back up system in place for when these problems occur. Unexpected problems such as this could result in a back log of undelivered goods. It could also have a negative impact on your production line.

When you add up all of these factors it can make investing in your own logistics and supply chain management expensive and time-consuming. The ultimate factor at stake here is your customer relationships. Without an experienced 3PL would you be able to keep your hard-earned reputation intact? And would you be able to make any savings at all once you have factored in all the costs?

By working with a third party and outsourcing your logistics, the benefits are numerous…

  • Improve on-time delivery
  • Reduce operating costs
  • Have access to your own fleet of drivers that are responsive to your business
  • Enjoy all the benefits of a private fleet without having to manage one!

Time Critical Transport and Couriers can customize a strategic solution for you.

With the right mix of employed drivers, fleet maintenance, routing, compliance, and administrative support they will keep your business moving more efficiently at a lower cost.

Get in touch and arrange a quote today!

Time Critical Transport