Should I Outsource My Houston Trucking Needs to a Logistics Broker?
As Hamlet said, “To outsource, or not to outsource / That is the question.” Well, okay maybe Hamlet didn’t say that, but he would have been just as right if he did. In my more than twenty years shipping product internationally and as a freight broker working with Houston trucking, that question has been considered more than once.
As a freight broker in Houston, I recommend my clients re-evaluate that question every year. Shipping needs change and so does the transportation industry. As we enter a new year, let’s look at why you should or why you shouldn’t outsource your logistics.
Reasons to Outsource Your Houston Trucking Needs
Every business is different and has different needs. In my experience, SMBs can receive a huge benefit from outsourcing. Simply, they can get an entire experienced team for less than the investment in a single employee. And they don’t need to do any training.
But whether an SMB or enterprise-level business, outsourcing can make a lot of sense. Here’s a few of the big reasons:
Time. Coordinating delivery, scheduling pick-up and tracking freight take a lot of time. For an SMB, that time can be better spent interacting with customers. Enterprise level businesses may have staff who can do these, but that can generate a lot of data to manage. Most third party logistics brokers have software that does exactly this. All of this cuts the time spent on shipping.
Staffing. Both SMBs and enterprise need to weigh the value of adding staff. I’ve not an SMB needs to consider whether bringing on one person will be enough to the job. For enterprise businesses, adding staff may not make sense when the work that needs to be done doesn’t justify a new hire.
Volume. How much shipping do you do? A small business with low volume can’t justify a logistics professional. On the opposite end of the spectrum, a large enterprise has so much they may need technology to support the staff. A broker can offer both of these companies (and everyone in between) a way to meet specific needs. Think of it almost like supplemental insurance.
Experience. Third party logistics brokers are loaded with experience. Unless the organization has a full blown logistics department, most employees won’t have the experience of logistics professionals. One other advantage freight brokers offer is an outside view. They may be able to offer new ideas on how to cut shipping costs.
Claims. This one may be simply part of the job, but it really does deserve recognition. Placing claims, managing and following-up require a great deal of effort. Plus, it can be frustrating and impact employee productivity.
Why to Manage All Shipping Internally
Ok, so we’ve looked at a few reasons to outsource. Now here’s why you should manage shipping internally.
You’re an enterprise level business with a comprehensive shipping department. On top of that, you own a transportation management software, or have a component on your CRM that does the job for you. This makes analysis and reporting fast and simple. The company probably owns its own warehouse.
There may be a good reason an SMB should manage shipping internally as well. If volume is very low and you’re not worried about minimizing the occasional cost to ship, or if most of your freight ships via parcel carrier like UPS and Fedex. These companies offer shipping services and could probably help out a client with the occasional one-off shipment.
When a Hybrid Model Makes Sense
For many businesses, a hybrid model makes the most sense. No freight broker wants to replace staff. Instead, they want to help every customer focus on their core priorities. For most, this involves sales and customer service.
A broker can take on the mundane tasks of coordinating, tracking, and running reports. This then frees employees to focus on data analysis and ways to enhance their customer experience. A hybrid model gives a company, be it SMB or enterprise, all the advantages of an entire team of professionals while alleviating the common sources of stress that come with managing seemingly endless details.
Does outsourcing or a hybrid effort sound like what you’re company needs? If so, let’s talk about how these might help.