Logistics services are very critical for any business involved in the transportation of goods from one point to another. Managing the entire set of operations on your own can prove to be too complicated and taxing, especially if you have other pressing matters on hand. As the costs of transportation related to logistics increases every year, it is only fair to think of outsourcing your logistics service requirements to a reliable company, thereby reducing costs significantly.
Outsourcing your logistics services requirements to an external service provider or a Third Party Logistics (3PL) company can prove to be a wise decision in the long run. Such logistics service providers mainly deal in services such as transportation, warehousing, delivery, and other related operations. They are growing rapidly by day, offering superior outsourcing strategies and transition plans at cost-effective rates. They work hard for their clients and make sure that they provide customized logistics services, as desired by their clients.
8 Reasons Why You Should Outsource Logistics Operations
There are many reasons to outsource logistics services, but you first need to understand how outsourcing will affect your business and whether it will save you costs or not. Some of the main reasons to outsource logistics services include -
Freedom to Focus on Critical Operations: Instead of trying to perform logistics services in-house, outsource it to a company that has in-depth expertise and experience in carrying out logistics operations with ease. This in turn will help you free up your resources and allow them to focus on other critical operations
Reduced Back-office Work: Most 3PL outsourcing service providers have sufficient manpower and the desired systems already in place. They can process thousands of bills and audit them appropriately within short time. Outsourcing logistics back-office tasks to professional vendors therefore frees up your time and increases productivity
Enhanced Customer Satisfaction: Most service providers specialize in logistics services only. They know the domain better than others and can come up with innovative ideas and strategies to further reduce costs for their clients, as well as deliver better experience. This leads to enhanced customer satisfaction and builds partnerships which can last a lifetime
Reduced Liabilities: The logistics service providers help to manage all inter-connected carrier contracts, safety ratings, and insurance certificates. More often than not, they have a back-office staff ready to work with invoicing variances, carrier vetting processes, etc. This means you stand to face zero liabilities as all the grunt work gets taken care of by the service provider
Efficient Handling of Petty Expenses: Small expenditures like insurance costs, docking costs, transportation, or fixed warehouse costs are all taken care of by the logistics service providers. You do not have to deal with petty expenses, thereby freeing up your accounting department's time
Economies of Scale: You might end up spending a lot on trying to scale up your existing team to perform logistics services in-house. However, a third-party logistics service provider can help you achieve economies of scale as they specialize only in providing logistics services, thereby being able to ramp up or ramp down services within short intervals
Efficient Real-time Tracking: Most 3PLs are technologically adept and allow for real-time tracking and visibility of loads. Some of the more popular service providers even provide integration with WMS and ERP. By being able to track your shipments with ease, you spend less time worrying and more time focusing on other core areas
Other Relevant Benefits:
Good warehouse management system (WMS) ensuring safety of your goods
Control remains with you, the client
Easy outsourcing operations process with duly signed documentation
How to Select the Appropriate Service Provider?
Once you decide to outsource logistics services, you need to spend time identifying the right service provider. Then, you need to make a detailed outsourcing plan with the service provider of your choice and get started. Specialist logistics service providers or companies that only specialize in providing logistics services, usually have detailed knowledge about transportation management services, customs brokerage, logistics consulting, freight forwarding, logistics information systems, warehousing, and other related domains. Some of the factors to consider include -
Review critical aspects like gap analysis, cost analysis, supply chain operations, and feasibility of outsourcing, among other aspects
Identify the service providers' expertise - number and capacity of warehouses, transportation system, procurement process, customer service channels, etc.
Check if major logistics processes such as pre-receiving, receiving, inbound inspection, pick up and drop, etc. are in-place, and to what extent
Perform a competitor analysis for cost-to-benefit ratio and check their customer interaction levels, back-office support, exceptional incidence rates, performance index, etc.
Choose Flatworld Solutions for Streamlined Logistics Back-office Services
With over 15 years of experience in handling diverse back-office operations for logistics, Flatworld Solutions can help you move ahead with logistics services. We differentiate ourselves by adding value to your business through streamlined and inventive processes. We place paramount importance on easy documentation, security, quality, and faster delivery times. By partnering with us, you stand to gain from the following -
100% compliance with state and federal DOT regulations
Zero risk and liability
Professional screening for all logistics team members for further peace of mind
Advanced infrastructure and technological systems in place to ensure valuable time is not lost in paperwork