How to take advantage of outsourcing in transportation logistics

Transportation logistics is a key part of any company’s supply chain, and is essential for success in a highly competitive global market. Logistics outsourcing is an optimal alternative that more and more companies are opting for when it comes to optimizing their operations and maximizing their profitability.

Outsourcing logistics services makes it possible to take full advantage of the multiple benefits offered by the specialization and experience of logistics service providers (such as speeding up times, improving efficiency or reducing costs).

In the following, we will discuss what logistics outsourcing is, its advantages and how it is the ideal service to add greater value to a company.

What is logistics outsourcing and how important is it today?

Logistics outsourcing is a strategy whereby a company outsources its logistics services to a supplier specialized in supply chain management. This provider is responsible for performing all logistics activities necessary for the transportation of goods, including warehousing, distribution and delivery.

When we talk about logistics outsourcing, we mean the delegation of services to a professional company with years of experience and specialized in this area, seeking to raise the level of competitiveness, productivity and profitability of the business.

Why is logistics outsourcing so important nowadays?

In today’s globalized and digitized market, consumers are increasingly demanding and require safe and quality products that are delivered immediately. In order to meet these high expectations, companies need to rely on modern and efficient logistics management, which helps to streamline the entire logistics process to deliver products in the shortest possible time.

A specialized provider is the ideal solution for speeding up and optimizing all logistics processes and providing the company with better supply chain management. In addition, this type of service also means significant cost savings, which means that the business will be more profitable and will have more possibilities to grow and expand.

Competitive advantages of outsourcing

Outsourcing logistics is a practice that allows a company to benefit from many interesting advantages. For example, leaving logistics operations in the hands of experienced professionals will speed up and make profitable the transportation of goods by road that the company carries out, and thus ensure that its products reach their destination more quickly and safely, saving costs in the process.

Let’s take a look at some of the benefits of outsourcing logistics and distribution operations:

Cost savings

By delegating logistics activities to a specialized provider, the company does not need to invest in its own infrastructure, personnel and technology to carry them out, which will result in cost and investment savings (in many cases of high amounts, such as the purchase of transport vehicles, for example).

Another important aspect is that outsourcing allows companies to convert fixed costs into variable costs, which can increase financial flexibility (by outsourcing, the costs of logistics services become variable expenses).

Flexibility

One of the main characteristics of today’s market is its great dynamism, i.e., conditions and trends vary greatly over time. Companies need to be agile and efficient in order to be prepared and react appropriately to these changes, so they can make better decisions to take advantage of the opportunities that arise.

Undoubtedly, logistics outsourcing is an optimal alternative to achieve this flexibility needed to respond in an agile way to the changes and variations that the market is constantly experiencing.

With a good provider to outsource logistics services, the company will also have the possibility of adapting its services in a personalized way to the needs of each customer, which will improve their experience and level of satisfaction (they will become a recurring customer and will recommend the company in their close circles, such as family, work…).

Increased efficiency

One of the great advantages of logistics outsourcing is the increase in business efficiency and competitiveness. Specialized logistics providers use advanced systems and technologies that help improve inventory management, route planning and freight distribution.

By outsourcing these activities, companies can improve the efficiency of their asset inventory management, which has a positive impact on their productivity and efficiency.

A company can be effective in managing its logistics, i.e., getting all the necessary processes and tasks done to meet the demand for its products in the marketplace. However, with outsourcing they will go a step further, turning this effectiveness into efficiency, i.e., meeting demand, but investing fewer resources, speeding up delivery times and ensuring a high level of service quality.

Frees up time and resources

Managing the logistics of a company requires the investment of a lot of time and resources, so it is necessary to have a department with an adequate structure and personnel, as well as many other elements such as tools, equipment, storage space, vehicles, etc.

Outsourcing implies leaving all these processes in the hands of specialized professionals who have an adequate infrastructure and a great experience managing logistic processes and tasks.

This logistics outsourcing will free up a lot of time that can be dedicated to other areas and tasks that are important for the operation and success of the company, such as marketing, production processes, customer service, etc.

Quality improvement

Logistics and transportation providers use modern methodologies and systems based on globally accepted best practices, so the company guarantees a high level of safety and quality in its logistics services.

Offering a quality delivery service is a great advantage in relation to competitors, making many customers prefer to buy the company’s products as they receive them quickly and in top quality conditions.

Improved control

A company is much more profitable and productive if it is able to precisely control each of its processes and tasks. Outsourcing allows any company to have that necessary control over its logistics operations, to ensure better business performance and more room for maneuver in various crucial aspects of the business (such as decision making).

By having access to detailed, real-time information on order status, inventory levels, transportation route management and other important logistical aspects, companies can make better strategic decisions, increasing the likelihood of successful outcomes.

Risk management

When a company outsources certain logistics activities to a specialized provider, it is transferring part of the risks associated with those activities. These companies are used to dealing with the problems and incidents inherent in the logistics and transportation processes, so they have adapted their processes and tasks to minimize risks and their consequences (logistics providers are better equipped to manage industry-specific risks, such as security, compliance and legal liability issues).

For example, a logistics provider may have advanced security and monitoring systems in place to reduce the risk of theft and damage in the transportation of goods. In addition, they may have compliance procedures in place, which saves the company from having to take on complex tasks to ensure compliance with local and national regulations.

How to generate added value

Outsourcing has become a common practice for companies looking to focus on their core business and increase their agility and efficiency. In particular, logistics outsourcing is a strategy to leverage the experience and expertise of logistics service providers to reduce costs and improve performance.

However, it is crucial to make good decisions when choosing the type of logistics outsourcing contract, as this can significantly affect the company’s financial and production success. When considering logistics outsourcing, it is important to evaluate the objectives and needs of the business so that the right service provider can be selected to ensure that medium- and long-term goals are met.

In short, outsourcing the company’s logistics operations will add extra value to the business, placing it above its main competitors in the market and ensuring that its customers receive a quality service with a high level of security.

By outsourcing logistics management, companies can focus on their core business and let logistics and distribution experts and specialists take care of day-to-day operations and tasks.

At Conde Fernández Hermanos we are experts in logistics and transportation services, with more than 50 years helping our clients to be more competitive by optimizing their logistics operations. In a globalized and highly demanding market like the current one, we offer you a personalized service according to the needs and characteristics of your business, so you can forget about the logistic aspects and focus on other important areas.