IL/U2 Topic 14 In-Company Management vs. out-Sourcing
Transportation is the beating heart of nearly every business in the world. People, products, and raw materials are constantly on the move — across town and around the globe — carried by container ships, cargo planes, freight trains, trucks of various sizes, and even pipelines. Transportation is how manufacturers get the resources they need to build their products, how retailers get the goods they need to stock their shelves and warehouses, and how online businesses fulfill their customers’ orders. An organization’s ability to manage the process of consistently transporting goods efficiently and cost effectively can easily spell the difference between profit and peril.
4 Core Benefits of Outsourcing Transportation Management
For any shipper, transportation management and the costs associated are a huge part of their business having a direct impact on profitability and competitiveness among numerous affects. And while the way you ship and the prices you pay will have a big influence on it, there are other elements involved as well that all need to be looked at. Outsourcing transportation management to a 3PL has these 4 core benefits.
- Better Productivity
By outsourcing transportation management, which often requires dealing with several if not hundreds of relationships with vendors, customers, suppliers, carriers, and other admin people, shippers free up their team to focus on other aspects of the business, such as better procurement or allowing for more strategic collaborative relationships with suppliers. This means that shippers will complete more work that will generate revenue while the 3PL handles the often fast moving stressful, difficult tasks of transportation management.
- Better Results
The simple fact is that when you utilize professionals, you get professional results. A 3PL focused on best practices and the use of the most up to date and effective transportation technology, is trained to identify mistakes or issues in the transportation footprint of a shipper and to not only point those mistakes out but also proactively mitigate such issues in areas of transportation accounting, freight claims, and more. When a shipper outsources transportation management, there is also more accountability yielding more professional results.
- Analysis, Reports, and Business Intelligence for Continual Improvement
One of the things we come across at Cerasis, especially as we are talking to prospective shipper customers, is that most shippers don’t have reliable or consistent data not only on the simple activities that occur in transportation, but they have no real way to analyze the data or gain insights that provide business intelligence in order to continually improve. When you outsource transportation management to a 3PL focused on transportation management, you should expect the use of a transportation management system to tender loads, choose carriers, and create bills of lading. Because all of the activity happens in this transportation management platform, several reports and custom analysis can be created. With the help of an expert transportation management company, you are then guided to make future decisions which truly impact efficiency and equates to even more bottom line savings. In short, outsourcing transportation empowers a shipper to get a clear picture of how to improve transportation strategies without having to struggle to get the information yourself.
- Simplifying the Chaos of Transportation with Technology
Thanks to technology many of life’s complications have been made drastically easier for us human beings. From hailing a cab, to finding a date, to getting a mortgage, or booking a flight, technology continues to bring down the walls of complexity offering a seamless, always connected, and device-agnostic experience for almost any major function of life and business. This too is true with transportation technology. The driving force of simplification in transportation technology is the use of a transportation management system. As we stated in our state of transportation management systems blog post earlier in the year, unfortunately, not all shippers are taking advantage of a TMS just yet. But, as we have stated in our benefits of a TMS blog post, if you are a laggard in the adoption of technology in supply chain functions, you typically will spend more time and money than you have to and you will hurt your long term competitiveness. And, to boot, as more and more customers, and your competitors, are turning to multiple sales channels and methods of distribution (often referred to as multi- or omni-channel logistics), there continue to be more advancements in transport:tation technology solutions for e-commerce and reverse logistics.
Transportation is known to be the movement of people, goods, and animals from one place to another. Modes of transport include air, rail, road, water, cable, pipeline and space. Transport management is important since it enables trade between people, which in turn establishes civilizations. While logistics and supply chain can be defined as the art and science of obtaining and distributing material and product in the proper place and proper quantities. This definition includes inbound, outbound, internal, and external movements. One of the most important agencies that you will need in your import and export business is a logistics services company. Whether you want to move your products to a regional location or an international destination, these companies are capable of providing the best and the quickest solution to ensure that your cargo reaches its destination on time and undamaged.
Picking the right Transportation Management and Logistics service can provide your business with a broad range of benefits you may not have considered.
Some of these advantages include:
LOWER DELIVERY COSTS
A Transportation Management and Logistics service has already heavily invested to provide a complete and integrated delivery solution. The maintenance and servicing of trucks, motorbikes and communications systems can be a very expensive option; also it may not be the best use of your company’s cash. Your capital may well be better used focusing on your core value proposition.
BETTER CASH FLOW
If you are delivering a high volume of items then a delivery company can help your cash-flow. Most companies will provide credit terms of 30 days or more, meaning you do not have to pay for the delivery service until you are paid. This can dramatically reduce your working capital requirements. Your delivery partner may also have warehousing and logistics capability; in this case integrating them more into you supply chain may lead to significant reductions in the cost directly impacting your bottom line.
A reputable courier company will have well-established links with all the major international logistics companies meaning you get a seamless delivery service. If you are curious on how this works, you can read about international logistics here.
Sometimes you just need an awkward job done or need something delivers in an unreasonable time frame, perhaps a package delivered to another country. When you use a professional delivery company, they will do the right job.
DEALING WITH INTERNATIONAL CUSTOMS
Moving goods across international borders can be fraught with problems; there may be restrictions on certain materials, the requirement to pay duties, local taxes or handling fees. Your courier service company will know what to do based on which borders you are crossing, saving you time, energy and the risk of penalties.