Managing transportation in-house can quickly become a logistical nightmare for non-asset based companies. Rising costs, unpredictable delays, and complex carrier relationships can drain resources and efficiency. For companies looking to streamline operations and focus on core competencies, outsourcing transportation management offers a strategic advantage. Below are 4 reasons to outsource transportation management to a 3PL.
Maximize Supply Chain Resilience
Whether due to infectious outbreaks, geopolitical unrest, economic upheaval, or catastrophic weather events, there is frequent volatility in the supply chain. Seasoned transportation management providers understand how to navigate the waves of uncertainty. They can adeptly leverage their relationships with carriers to optimize modes of transportation, reroute shipments in transit, and minimize disruptions. Due to their expertise and experience, these providers can maximize supply chain resilience.
Reduce Financial Investment & Lower Administrative Burden
Managing transportation on top of core responsibilities can put a lot of stress on companies, regardless of size. They may not have the human or financial resources available—or wish to devote existing resources—for tasks such as negotiating freight rates, coordinating with carriers, completing and managing necessary paperwork (manually or digitally), resolving disputes, processing claims, complying with regulations, and managing records. These companies realize the day to day benefits of outsourcing the administrative side of logistics, instead of investing time and dollars into hiring and retaining staff with the appropriate skills—or training staff who don't have them.
Benefit from Technological Resources
Managing transportation requires the proper technology to arrange for shipments, track them, and ensure they are in compliance with relevant laws and regulations. It also requires the personnel trained in how to use it. A transportation management partner will have already invested in a transportation management system (TMS) and will have the personnel skilled in operating it. The TMS will provide them with real-time visibility, alerting them to any potential delays, and allowing them to identify the best routes and available carriers to move freight in the safest, most efficient manner.
Lower Freight Costs
Seasoned transportation management providers can leverage the volume of transactions that they handle to negotiate cost savings with carriers. Additionally, seasoned providers can rely on loyal relationships with carriers, built over the years, to secure more favorable rates. Transportation management providers can also use their expertise and tap into their extensive networks to consolidate shipments, thereby reducing the cost for individual shippers. Companies that do not specialize in transportation management—or are not large enough to have a special, dedicated department that handles it—cannot come close to achieving these savings.
In today’s fast-paced supply chain landscape, businesses need efficient and affordable transportation solutions. The most successful supply chains are built on agility, visibility, and cost control. By outsourcing transportation management services, companies can gain a competitive advantage benefiting from the industry expertise, advanced technology, and carrier relationships that transportation management experts provide. Need a partner to help you with your shipping needs? Reach out to ASW’s Transportation Management Team for more information.