Logistics is one of the most important aspects of any business. It doesn’t matter if you work for a large corporation or are in charge of your own small business, you have to think about the best way to ship your packages.
In the early days of your company, it was probably pretty simple to manage shipping needs. A few boxes each day, maybe a couple of pallets on a truck once in a while — nothing too complicated. But now that your business has grown, so has the volume of items you receive and send out each day.
The obvious way to meet those increasing needs is to hire more people to handle shipping your orders.
Unfortunately, expanding internal shipping capabilities comes with a lot of problems:
- Additional headcount leads to higher labor costs.
- Increased volume means more work centers or warehouses.
- Onboarding, hiring, and training require a lot of time, management, and paperwork.
- Fuel and vehicle maintenance costs continue to rise.
- More vehicles on the road lead to higher insurance costs.
So, what should you do? Outsourced courier services have quickly become one of the most effective ways to scale with ease.
Here are 10 advantages to outsourcing logistics services:
1. Outsourced logistics reduces costs
You’ll save on payroll.
Logistics is a time-consuming task, and you have to pull employees off the job to get it done. Those employees cost money, especially when they’re performing tasks outside their core competencies. However, by outsourcing shipping services, you can eliminate these payroll costs while allowing employees to concentrate on what they do best.
You’ll save on fuel and maintenance.
If your company ships large quantities of product regularly, you probably have a fleet of vehicles for transporting goods around town or across the country. Those vehicles need fuel and regular maintenance, not to mention insurance and licensing fees.
By outsourcing logistics services, however, you can turn over transportation to a third party that specializes in it. That means no more vehicle maintenance or fuel expenses for your business. You can also reduce the amount of insurance your company carries since most third-party logistics companies are fully insured by their carriers.
These are just a few ways outsourcing logistics reduces costs, talk to a Dropoff expert to see if outsourced logistics is right for you.
2. Outsourcing improves fleet efficiency
The majority of companies don’t have the resources or expertise to manage a fleet efficiently. Outsourcing your fleet means that the will always be an expert available to proactively handle issues as they come up. You also gain access to a variety of vehicles that may not be cost-effective for you to buy or lease on your own.
Logistics companies focus all of their energy and expertise on getting products from A to B. So it’s no wonder they’ve developed the systems and tech to enable the most efficient shipping possible.
At Dropoff, we handle the shipping needs of 270+ global brands, and our efficient practices are one of the reasons we’ve proven time and again to be an industry leader.
3. Outsourcing logistics helps you focus on your core competency
Every aspect of running a business involves its own set of challenges and hurdles to overcome. Whether it’s marketing, sales, or customer service, there are always things that take time away from other aspects of running your company.
That’s why it’s so important to focus on your core competencies and hire experts to take care of anything that falls outside of those areas.
Outsourcing your shipping allows you to focus on what you do best—like growing your business—and leaving the logistics challenges to the experts. This leads to faster growth, better execution, and a higher quality of results for your customers.
4. Outsourcing logistics increases customer service levels
Customer satisfaction is a top priority for any business. Around 80% of customers say they’ve stopped purchasing from a company after having a poor customer service interaction. (Zendesk)
One of the most important aspects of customer service is fulfillment and shipping. Yet, this can be especially challenging for eCommerce businesses because it’s difficult to manage orders efficiently and accurately when you’re juggling other business responsibilities. In addition to creating an overall lackluster experience, poor shipping and fulfillment can also result in costly chargebacks or lost sales.
A solid shipping strategy is essential if you want to improve your customer service levels.
By outsourcing your shipping logistics, you can focus on other parts of your business—like providing exceptional customer service. Not sure, how to choose a third-party logistics provider?
5. Outsourcing logistics gives your company more time for strategic thinking and planning
There’s nothing more stressful in the world of business than having to go it alone. You have to do everything yourself, and you’re constantly overwhelmed with options and decisions that you need to make. Not only is it an enormous amount of pressure, but it also means that you don’t get to spend nearly enough time on the things that matter—like planning and strategic thinking.
Strategic thinking requires a lot of work. It involves getting down into the details about what your company does, what your goals are, and how you can improve your current processes. It involves taking stock of all the pieces involved in making your business function as a whole, from supply chains to customer service. And it involves identifying areas where your company could be more efficient and achieve its goals faster or more effectively.
Business owners and operators are often too busy dealing with all the little aspects of running a company. Outsourcing allows you to focus on the big picture: building your business into something truly incredible.
6. Third parties improve your insight into new technology, trends, and best practices
The logistics industry has seen its fair share of technological advancement in recent years, with the advent of software logistics companies can now offer same-day delivery and real-time tracking. It’s a field that’s always changing: new technology emerges, new trends emerge, and so do new best practices.
The challenge is keeping up with these innovations, or finding creative ways to integrate them into your existing business model, while also continuing to meet your customers’ expectations.
When you outsource your shipping and fulfillment needs to a logistics company, they’re incentivized to stay on top of emerging trends, technologies, and best practices because it benefits them directly—and it benefits your customers indirectly.
7. Third-party services enable you to offer your customers a wider range of delivery options
Offering customers a wide range of shipping options can be tricky, but it’s worth the effort. By outsourcing delivery to a national provider, you can offer your customers a wider range of delivery options like:
- Same-day or next-day delivery
- Guaranteed delivery by a certain time (Example. before 9 AM)
- 2-day delivery
- 4-6 day delivery
These delivery options are made possible through popular courier services like Dropoff and give you the ability to achieve more flexible delivery times with minimal impact on your bottom line.
8. Outsourcing logistics improves customer experience
When you outsource transportation, you get the benefit of a company whose entire business is designed around logistics. They have streamlined practices that allow them to offer quality logistics services at the best prices. This means that your customers will receive their packages quickly and reliably every time they order from you. Consequently, you will have full visibility over last mile delivery tracking and other logistics KPIs.
9. National couriers offer your customers peace of mind while reducing the risk of lost or damaged packages
Third-party logistics services enable you to offer your customers more consistency by reducing missed delivery times and lost packages. By outsourcing courier services, you can partner with reliable and experienced third-party providers that have the infrastructure and advanced technology necessary to ensure your package is delivered in a safe and timely manner.
10. Third-party providers remove the stress of maintaining shipping regulations and compliance
Shipping restrictions are constantly changing, this is especially true when it comes to international shipments. The last thing you want is for your business to be delayed or penalized because of a simple oversight. A national third-party provider will have the knowledge and experience needed to ensure that your shipment is safe and compliant every step of the way.
National third-party providers often handle shipping solutions for several different businesses, this means they have extensive experience dealing with a variety of products. This experience means they can handle just about any type of shipment, from hazardous materials to food and beverages, with ease.
If you’re regularly shipping sensitive materials, like chemicals, or regulated equipment you’ll have plenty of reasons to work with a national courier with experience in your industry. Especially, if you operate in the healthcare space that requires HIPAA compliant shipping.