E-commerce in the US is projected to exceed $1 trillion in revenue — double the amount from 2019. This has led to a surge in delivery services, bringing plenty of opportunities for logistics companies to thrive, but keeping pace with growing demand is also a challenge. As consumers expect faster and more reliable deliveries, providers must find new strategies to enhance their operations. If you’re bogged down with capacity challenges and delays, your company could stand to invest in new strategies like outsourcing logistics. Stay competitive by outsourcing some of your logistical operations: with outsourcing, you can optimize efficiency, streamline your supply, access game-changing technologies, and build strong partnerships.
Logistics outsourcing involves delegating back office and administrative tasks to a third-party or offshore partner. This frees up your onshore team to focus on executing deliveries and maintaining service quality. Tasks like tracking, scheduling, documentation, and even customer support can all be handled by an auxiliary team, while you retain full control over your operations.
Let’s take a look at how outsourcing logistics can benefit the average logistics company and keep up with the demands of the booming e-commerce sector:
1. Reduces costs
Outsourcing logistics reduces your costs significantly, especially between labor and operating expenses. With an offshore team, you can reduce labor costs by up to 70%. With a reputable outsourcing partner, you pay only fixed monthly or yearly fees, as opposed to spending thousands hiring and training for in-house positions. You’ll also save on operating expenses, as you’ll require less space and equipment. The cost savings from outsourcing logistics can be redirected to other areas of your operations, like freight and supply chain improvements.
2. Access to advanced technologies
Logistics outsourcing allows you to leverage advanced technologies and create seamless operations across your supply chain. As you partner with an outsourcing firm, their service comes packaged with easier simplified communication channels and more robust tracking technologies. You’ll be able to integrate these with yours, or upgrade as you see fit.
3. Access to expert talent
Outsourced logistics management and outsourcing, in general, allows you to tap into a global talent pool of experts who specialize in various aspects of logistics management. Your outsourcing partner can hire and manage professionals with skills in database management, order tracking, or other logistical tasks that are critical to your operations. By tapping into this skilled workforce, you can ensure that tasks are completed with precision, accuracy, and efficiency. This allows your in-house team to focus on core competencies while your third-party logistics provider handles the back-end functions.
4. Improved focus on customer relationships and service
By outsourcing logistics management, you can dedicate more time to developing and enhancing customer relationships. With your outsourcing partner handling back-office tasks and administrative processes, your in-house team can focus on providing superior customer service, meeting deliveries, and growing your market. This justifies the need for outsourcing: focusing on customer satisfaction will help you retain clients and boost brand loyalty, while ensuring deliveries are completed on time and without a hitch.
5. Enhances supply chain flexibility
Outsourcing certain logistical tasks can improve flexibility within your supply chain. With an external team handling all the back-end administrative tasks, your supply chain becomes more responsive to market fluctuations. This is one of the key benefits of outsourcing logistics: You can scale your logistics operations according to market demand without worrying about compromising your service’s quality.
6. Reduces risk
Lastly, one of the major benefits of outsourcing logistics is risk mitigation. When you outsource to a trusted partner, you ensure that business continues even despite labor shortages, compliance changes, market fluctuation, and unforeseen natural events. With an outsourced team covering your back-end operations, the chances of delays and long-term interruptions is reduced. Reliable outsourcing service providers are equipped with the infrastructure and policies to handle such disruptions so that business continues as usual during these critical times.
All in all…
Whether you’re a third-party logistics (3PL) or e-retail business, it is advantageous to make your operations seamless by outsourcing logistics management. With it, you can stay competitive in the rapidly evolving e-commerce landscape by streamlining operations, reducing costs, and enhancing flexibility.
Outsource logistics management and access expert-level talent by partnering with FGC+ today. Learn about our powerful end-to-end outsourcing solutions at www.fgcplus.com.