Whitepaper

Captive vs Outsourced Fleet: Math behind Transportation and Distribution

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The decision of owning a fleet versus outsourcing transportation and distribution is a very important decision for any company. Cost and efficiency are two major factors that influence this decision. In this paper, we simulate multiple scenarios in which these two factors are tested for optimality in both captive and outsourced fleet.

Why read this whitepaper?

The objective of this white paper is to help businesses make smart and informed decisions on their fleet requirement for the last-mile movement.

How did we do this study?

We start with understanding the impact of the increase in the number of orders on distance traveled and journey time, and eventually, the cost of operations. This activity is repeated for outsourced and in-house fleet operating models.

The following metrics were explored with respect to an increase in the number of orders/day:

  • Change in number of miles per order (for in-house)
  • Operational costs for outsourced and captive fleet models
  • Break even point and further extrapolation.

New York Metropolitan area has been chosen for this study, implying, the geographic and cost data for various entities of the New York metro area has been factored into the calculations to make the model relatable with various retail, 3PL/4PL and E-commerce businesses that operate in the area.

Since the business models and operational processes are different for in-house and outsourced transportation, different approaches have been used to perform the study. A combination of real-time constraints, on-ground data, research data and assumptions have been used to calculate the total transport cost.

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How can Locus help manage your logistics?

  • Locus’ proprietary geocoding engine converts the fuzziest of the addresses into precise geographical coordinates thereby helping your on-ground executives locate addresses easily.
  • Digitize all your operational variables such as fleets, delivery persons, etc to come up with the best route plan every day.
  • Track your orders in real-time with the Locus Live Dashboard. Locus’ last-mile delivery app Locus On The Road (LOTR) helps delivery partners process orders.
  • Visualize and tweak your scheduled plans via three key metrics— geography, time, & vehicle(fleet)—with a birds-eye view of your entire operations.
  • Build your own reports and analyze important parameters that you need to make key decisions.

Join Industry Leaders:

$100 M+
Logistics costs reduced
100+ Years
Planning time saved
6300 + Tonnes
GHG emissions reduced

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