Truckload logistics is more than mere truckload shipping. It requires coordination of suppliers, vendors, carriers, and even storage, to manage the entire series of steps along a supply chain.
Logistics is a specialty field of management and, depending on your industry, may be critical to maintaining your business operations. You are often faced with three choices when seeking logistical support:
- Third-party logistics. A business that focuses on managing your supply chain for you.
- In-house logistics. An employee within your business who manages your supply chain.
In-house logistics makes sense for businesses in the delivery and shipping business. Likewise, businesses with extensive supply chains can justify an in-house logistics department. For example, auto manufacturers, delivery companies, and import/export businesses handle their own logistics.
Third-party logistics works best for businesses that have complicated supply chains that require full-time management but prefer not to hire a logistics staff. Examples include specialty manufacturers or manufacturers whose products require special handling.
Here are three examples of customers who use third-party truckload logistics:
One of the benefits of outsourcing logistics is that a company can focus on its core business while leaving supply chain management, transportation, and storage to the logistics experts. For example, pharmaceutical companies require extensive inputs for its manufacturing activities. However, pharmaceutical companies, particularly smaller pharmaceutical companies, would likely prefer to focus on chemistry and biology rather than pharmaceutical logistics.
Outsourcing pharmaceuticals transportation and logistics to a third party can relieve the pharmaceutical company of coordinating transportation of chemicals and other manufacturing inputs when they are needed and while they are at their peak of effectiveness. Moreover, a third-party expert in pharma logistics can ensure that the finished products reach customers without suffering any loss of quality along the way.
Food companies operate on very thin margins and have very perishable products. One mistake in truckload logistics can result in the loss of an entire truckload of products at a cost of many thousands of dollars.
Third-party logistics providers have the experience to schedule shipping so perishable goods arrive ready for sale. Moreover, logistics providers have the connections to arrange specialty transportation such as refrigerated trucks or expedited trucking for, particularly sensitive shipments.
Likewise, when importing and exporting goods, third-party logistics companies know how to make sure that shipments are not held up by customs agencies. Again, with perishable goods, time is of the essence and any delays crossing an international border can result in major financial losses.
Heavy machinery manufacturers may make very few shipments per year. For example, specialty mining or manufacturing equipment manufacturers may only produce a few hundred machines per year. However, the value of those machines can be enormous due to the time and labor put into them.
Outsourcing logistics makes sense for these types of manufacturers. It would be less essential to negotiate good shipping rates than to ensure that the machine arrives undamaged.
Third-party logistics offers substantial benefits. Costs are often lower and expertise is often higher when outsourcing logistics. As a result, your business often receives better logistics support through outsourcing.