Shippers: Have you considered contracted or outsourced fleets?

Transportation networks form the vital nerve center for every delivery-focused organization. Even the industry’s titans, who boast sizable in-house fleets, often find themselves outsourcing orders to third-party carriers due to overwhelming volumes and the absence of logistical infrastructure in specific areas and countries. However, it’s not merely these reasons that should prompt delivery organizations to consider strategic partnerships with external transport providers.

So, what hurdles do companies encounter when exclusively reliant on an in-house fleet?

Seasonal Demand Surges:

Holidays inevitably bring a surge in orders that frequently outstrip the capabilities of an in-house fleet. The resulting strain can lead to order cancellations or even halting new order acceptance, negatively impacting sales and revenue.

Elevated Costs:

Factors like fuel, vehicle and driver management, alongside other logistical costs, can place organizations in challenging predicaments, especially when vehicle scarcity hinders on-time delivery. Consequently, if revenues dip, maintaining these costs becomes untenable.

SLA Violations:

Service Level Agreements (SLAs) are a key performance indicator for delivery companies. Prompt, on-time and in-full delivery forms the essence of most SLAs, and customers frequently select delivery providers based on their track record in this area.

Deteriorated Customer Experience:

Today’s discerning customers place significant value on their delivery experience, on par with factors like discounts and product diversity. A purely in-house fleet can only take a company so far. As the digital consumer base expands, and with it, the volume of orders, outsourcing to third-party carriers becomes indispensable to ensure uncompromised delivery experiences.

Assumed Risk:

When delivery companies use an in-house fleet exclusively, they bear the full brunt of any delayed delivery risk. The shipping company’s last-mile dispatcher becomes solely accountable for any fleet-related issues, potentially damaging delivery performance.

How can shippers save cost and enhance delivery experience for customers?

Shippers need to save cost and enhance delivery experience for their customers by opting for contracted and outsourced fleet options, which can provide them with variety benefits:

Addressing High Demand:

A substantial benefit of forming alliances with transport providers is the ability to obtain vehicles on-demand, an aspect particularly useful during festive periods of high order influx. Such partnerships enable shippers to avoid order cancellations or imposing limits on order volumes due to fleet-related issues. However, the selection of a suitable carrier or transporter, one that aligns with your SLAs, cost parameters, and other last-mile objectives, is paramount. Innovative last-mile technology solutions, like an intelligent carrier management system, can guide shipping companies in choosing the right transporter. Locus’ ShipFlex solution facilitates the automation of finding the right third-party delivery, eliminating room for manual errors.

Read also: How Transporter Management System can help shippers

Shipping companies can also utilize transporter management solutions that offer each partner dedicated dashboards, visibility into all orders, automated invoice generation, and calculators that leverage on-ground data to reduce billing discrepancies. This is particularly beneficial for transporters using legacy systems without a strong digital infrastructure or API enablement. Locus’ Transporter Management system aims to enhance communication between shippers and transporters using non-API based systems, promoting transparency.

Cost Efficiency:

Outsourcing deliveries can provide a breath of relief to shippers. Essentially, transporters offer on-demand vehicles and drivers, allowing shippers to fulfill more deliveries. This approach aids in efficient utilization of existing in-house resources, preventing burnout.

Improved SLA Compliance:

Outsourcing also provides more resources at your disposal, leading to a higher likelihood of adhering to your SLAs.

Superior Customer Experience:

Swift and timely delivery facilitated by an efficient transporter can bolster customer loyalty, a significant asset for shippers.

Risk Distribution:

Although the shipper bears the responsibility for order delivery to the customer, incorporating a transporter into the equation can effectively lighten the shipper’s load. Nevertheless, as reiterated, the selection of a suitable transporter that aligns with the shipper’s last-mile objectives is essential.

To Conclude

The aforementioned points provide compelling reasons why shippers need to consider outsourcing deliveries, rather than relying solely on their in-house fleets. Locus has a proven track record of aiding reputable shippers such as Unilever, Nestle, TATA, Lulu Group, and many others in optimizing their last-mile delivery using robust technological solutions.

If your supply chain requires optimization and automation, consider booking a demo to explore what Locus can offer you!