21 Jul
Top 5 Reasons to Outsource Logistics

outsource logistics
All sales people are part teachers, in that it is their primary duty to inform potential customers of their product or service. Persuading the client the product or service will add value to the client’s company in purchasing the product is secondary.

Our sales team here at PWL is no different. We invest tremendous time and resources into training and educating our sales team members about the logistics industry. They, in turn, spend more time teaching clients about our nuanced industry than they do actively trying to sell our services.

The logistics industry is notoriously nuanced and rife with regulatory shipping considerations. Like other fields of business where this is the case — such as IT, law, and accounting — logistics is imposing. People are afraid of what they don’t know or understand, so any employee not directly responsible for shipping avoids logistics.

Because the logistics industry, itself, is so technical, most companies assume outsourcing logistics will be a major undertaking. This is not the case! Outsource logistics is much like hiring additional web developers or designers — or outsourcing the creation of your online process altogether. Logistics companies are experts in what we do. This means we have the benefit of a wealth of experience to draw upon. We’ve seen the mistakes you’re inevitably making hundreds of times, and know how to fix them. Outsourcing logistics is a sure-fire way to streamline processes, reduce redundancies, broker better shipping rates, and add to the company’s bottoms line by doing so.

Read on for our top five reasons why outsourcing logistics is a smart move for every company with shipping needs.

1. It saves your company money

The monetary benefits of switching to outsourcing logistics are many. First and foremost, it saves your company millions of dollars by capitalizing on an infrastructure that third party logistics companies (3PL’s) already have in place rather than investing that money building your own network. Consider the tax and payroll benefits you receive by eliminating a logistics department. Funnel the money saved on salaries, 401(k)’s, health insurance — and the taxes on them — into outsourcing your logistics to experts.

Outsourcing logistics also provides you access to significantly reduced shipping rates obtainable only by brokers whose business is shipping the goods of hundreds or thousands of companies. You keep your clients. These happy clients refer their friends so your book of business grows. You no longer lose time or money fixing the mistakes of your truck drivers. All this money goes into the bottom line because outsourced logistics takes the headaches off your plate.

2. It makes for happier customers

It’s common knowledge in the business world that many companies outsource areas like law and technological services (e.g. web design and web development). Studies show that when you pass off your non-core services to experts in those industries, customer service and customer satisfaction improve. Same logic applies to logistics, and doubly so. It’s no secret loss and damages are hazards of the transportation industry. Our customers consistently comment on how much peace of mind it brings them to have a team of crisis veterans fielding these calls and replacing concerns with solutions.

3. It’s efficient

Consider why people hire realtors, wedding planners, teachers, etc. These people all are experts in their respective industries and specialize in what they do. An established realtor has sold and bought hundreds of houses; the couple trying to sell their own house will do so only a handful of times throughout their lives. Though realtors charge a commission for their services, it often still results in net savings for their clients: realtors know how to stage the house for photos and walk through. They have connections in the community to secure discounted advertising, and relationships with other realtors that will allow them to get the best deal on the house in a shorter timeframe. Such is the case with outsourcing logistics to third party logistics (3PL) like PWL.

Logistics is only one branch of your company; logistics is our company. You will have to learn and train and manage a team to maybe achieve a level of success that resembles our long-established business model. When companies like PWL save you time, you’re able to focus on your strong points. Rather than spending time managing your freight, the 3PL does – we even send morning reports. That’s a lot of soft dollars and time saved. 3PL’s are of value because of the time it takes to manage all a company’s freight from tracking to resolving issues to billing to guaranteeing the satisfaction of your customers.

4. It’s flexible

In this day and age where technology rules, it’s imperative to operate nimbly. Logistics companies should be able to adjust their pricing based on economic factors as quickly as gas stations can raise or lower their fuel cost. This is possible only with the advantageous economies of scale available with outsourcing logistics to a broker like PWL. Like everything else, logistics is supply & demand. For example, when Walmart orders a million trucks in a short period of time, that limits the number of available trucks for general freight, which causes fluctuation in rates. PWL monitors that to offer the best options during these times. Our relations with our carriers secure us capacity for our customers.

5. It minimizes risk

There are several kinds of risks you take when you keep logistics in house. Firstly, at the end of the day, business is about the bottom line. When your company manages logistics, you are likely not capitalizing on the complex rate structures and types of transportation options. Certainly, it is not possible to maintain the shipping discounts brokers like PWL are able to obtain as a result of our economies of scale. Outsourcing logistics ensures you don’t leave money on the table.

The second kinds of risks minimized by outsourcing logistics are legal ones. Outsourcing logistics to a firm well-versed in the ins and outs of compliance and regulatory standards eliminates your risk of accidentally violating one and being fined. Additionally, delayed and lost goods happen less frequently, resulting in the happier customers mentioned above. Happy customers continue to patronize your business. Happy customers also do not sue you.

Outsourcing logistics is one of the best things businesses can do to improve their workplace quality of life and improve profits. Yet, it is often overlooked because it is incorrectly assumed to be an arduous process. Be one of the smart businesses that outsource logistics, and position your company ahead of competition immediately.