In-house Trucking Operations Vis-à- vis Outsourced Trucking Operations

Both in-house trucking operations and outsourced trucking operations have their own benefits for manufacturing companies, wholesalers, and retail businesses. In this article, we will tackle the two based on different factors to also help you decide which overall will be more beneficial.

Expenses

While in-house fleet management gives you control, especially on the supply chain, it’s essential to note that maintaining vehicles, upgrading facilities, and keeping parts inventory is expensive, as are labor-related costs for service technicians and administrative support. Simply maintaining full-time drivers as company employees would cost the company some capital.

Many businesses, especially start-ups have limited capital. Diverting such amount to trucking expenses rather than for the expansion is something experts wouldn’t recommend. The bulk of the budget must be invested in areas where a business could reach and retain more clients such as marketing, customer service, and quality of products.

When a company outsources their trucking and transportation, they no longer have to worry about spending money for maintenance and other vehicle-related expenses since these things are already covered by the third-party provider.

Operating Risks

There are some risks in managing your own transportation and vehicles such as the risk of vehicular accidents, the risk of delayed operations, the risk of underutilization of equipment, the risk of penalties for non-compliance to traffic rules, and more. Retail business and start-ups would very much benefit from outsourcing their trucking operations as it could free them form worrying from the said risks.

In fact, outsourced fleet management services providers are trained to identify mistakes and issues with product delivery, as well as create solutions or alternatives for those concerns. Simply put, when you utilize professionals, you get professional results.

Time Consumed & Time on Business

Managing your own shipping and transport is a business itself so business optimization will not come easy with too much on your plate. At times, when you should be focusing on clients,
some problems related to your fleet and in-house operations would demand your time. Hence, outsourcing results in better productivity. The process involves dealing with several vendors, customers, suppliers, and carriers, among others. With continuous dealing, it allows for better negotiation, collaboration, and credibility, which could ultimately lead to potentially more clients and better sales.

To every business, there are benefits and drawbacks of managing your own vehicle operations for transportation or relying on third-party logistics provider to do the job. Case in point, it all comes down to the best interest of your business in general. We hope this article has helped you decide in any way.

ICT Admin

Ernest Logistics Corporation