Outsourcing Transportation ManagementMay 15, 2018
You make the best cupcakes in all of the United States. People line up for hours at your store to purchase one of them. Demand is so strong that you’re thinking about opening a second or maybe even a third store in the city. The quality of your cupcakes has gone viral online, so you’re exploring ideas about going national or even international via the Internet.
You see a glowing opportunity right in front of your face to expand your business and your profits.
Only one problem.
You’re a baker, not a shipping executive. You know a very great deal about how to make cupcakes that drive people crazy. But you know next to nothing about how to get those cupcakes to other stores in your city or, let alone around the nation or world. You can hire someone who understands supply chain management, but you don’t have the time to find the right person, and you’re worried about the cost.
So what do you do?
Why It’s Time to Outsource Your Business Transportation Management
At this point in your business plan, it’s probably time for you to consider the advantages and disadvantages of outsourcing transportation. If you hope to expand and meet your goals, knowing about your options is the best first step. There are so many benefits to outsourcing your transportation management. Once you opt in, you’ll be able to:
- Focus on what you do best: Whether it’s making cupcakes as in the above example or crafting engine parts, chocolate, floral arrangements or any other goods, you want to spend your time improving your product and making more of it — not figuring out how to ship it.
- Save money: Outsourcing your transportation management also allows you to achieve another important goal — saving money. When you work with a trusted third-party logistics (3PL) partner who can handle all your shipping needs, you don’t have to worry about hiring a new employee to do it. And with the cost-saving technologies employed by most 3PLs, your cupcakes will get to where they need to be on time and in great shape, which means no lost goods that you have to remake without compensation.
- Stay flexible: When you’re in business, every day is different. Some days, people want more of your product. Some days, they want less. Third-party logistics providers can provide you with the flexibility you need. They can quickly adapt to that day’s schedule. You have a huge order, they send a big truck. You have a small order, they send a small truck. If you try to do all this on your own, you’ll probably have only one truck, meaning you could wind up wasting shipping space. That costs you money.
By now you may be thinking, “Okay, I see the benefits of outsourcing transportation management. But what if I made more than cupcakes? How do we determine what needs to be outsourced?”
Actually, that’s easy to determine. If you’re spending a lot of time and energy — and too much money — on something that’s not what your business is all about (i.e., making cupcakes or wedding cakes, etc.) you need to seriously consider outsourcing transportation management.
What Is a Core Competency?
Surprisingly, not everybody knows exactly what their business is all about. It’s only been since about 1990 that the issue of core competency has really taken hold of the business world. Before that, people could dabble in a lot of different areas and get by. But in a 21st-century world, where more people are looking for specific items of good quality, generalists just don’t seem to be doing as well as they did in the past. The world changes, and if we want our businesses to succeed, we must change with it.
So how do you determine your core competencies? Consider the following criteria:
- It is a process that makes a difference to the quality of the end product.
- It’s something you do that provides you with ideas for new products and services.
- It’s a product that’s very difficult for competitors to easily duplicate. It’s unique, and that’s one of the things your customers love the most about it.
To go back to our above example, if you make cupcakes that your competitors can’t duplicate, that’s a core competency, as are all the processes that go into making that cupcake. This work is where you want to spend your time and energy — making better cupcakes and thinking about improvements to what is already a unique product.
On the other hand, transportation management systems are, therefore, not one of your core competencies. But think of it this way: When it comes to the time and energy you put into your core competencies, 3PLs are doing the same thing with their business. They’re always looking for better, smarter and more cost-effective ways to ship your products to both traditional and new markets.
You focus on what you do best, they focus on what they do best, and you end up with a logistics supply chain that helps you grow your business in new and dynamic ways.
Why Third-Party Lostistics Is Such a Good Idea
Technology has grown and become an important part of any business’s everyday operations, and 3PLs are one of the best examples of this trend. Supply chain logistics has, in a very real sense, democratized the transportation industry. It’s now much easier for smaller companies to effectively partner with a 3PL company, and the 3PL companies themselves use technology to improve their service. This strategy enables them to deliver a service far superior and at a far better cost than what was achievable in the past.
This pairing is especially important for smaller companies looking at expansion. Because of the way social media works, a cupcake business in New York City can earn a global or national reputation with just a few clicks. If the company wants to take advantage of new markets, it can do so quickly and efficiently by partnering with a business that specializes in outsourced transportation management logistics. You make it, they ship it, and suddenly you have new, satisfied customers in Seattle or Bangkok or Toronto raving about your cupcakes.
Here are some other benefits of third-party logistics providers. You’ll be able to:
- Save money: We mentioned this above, and for good reason. It’s probably one of the most important reasons you use outsourced transportation. Transportation management companies offer real discounts, because transportation logistics is all they do. When you have a lot of business from a lot of people, you can provide them all a better cost.
- Avoid liability: Nobody likes to think about liability or insurance. But transportation management companies do. It’s one of their core competencies. They know the DOT rules and regulations that need to be followed because they have people who focus on this area. They spend the time making sure your shipments follow the letter of the law, so you can concentrate on making better cupcakes instead of wondering if your shipments are going where they need to be.
- Have fewer bodies: There’s so much paperwork that goes along with shipping: invoices, bill payments, government forms, international border issues if you ship globally, calculating the most cost-effective rate to ship your products. You don’t need the hassle or all that stuff. Knowing when you work with a transportation management company that they have the staff and knowledge to handle all this complicated paperwork illustrates a real advantage of 3PL transportation.
- Benefit from versatility: The more the merrier. 3PLs can work with many individual carriers and companies. When you call them and tell them you have a shipment of such and such a size, to go to such and such a place, they will know exactly who to select to give you the best value and get your products to market on time. The right size truck, at the right time, at the right price. This versatility is one of the most popular benefits of outsourcing transportation.
- Customize to order sizes: Size matters. Businesses that operate their own trucks always face the question of “Should I sent this truck that’s only half full because I need to get these cupcakes across town by nine?” When you work with the 3PL company, they or the companies they work with will find you the right size truck so that you never have to ask yourself these questions again.
- Maintain scalability: Most 3PLs have their own warehouse facilities, which means you won’t need one. When your demand goes up or down, it’ll be easy for the 3PL to adjust the warehousing space you need.
- Hold onto peace of mind: Okay, you want to focus on making better cupcakes. But transportation companies realize you also want to make sure your products are getting where they need to be on time. Quality 3PL’s offer their customers tracking systems to follow products, and they can also send you real-time email notifications that the product has been delivered. You’ll be able to enjoy a level of visibility that lets you know things are working as they should.
Quality Versus Cost
Cost is always important to every individual or company that works with a 3PL on outsourced transportation management logistics. Most customers are the happiest when they can achieve better visibility and better services for the same cost. Strangely enough, however, the cost is not the most important factor. According to a survey done by Inbound Logistics, 80 percent of those who took part said what mattered to them the most is quality. Only 20 percent stated cost.
Looked at the situation realistically, the cost is always crucial. Yet the quality factor plays a huge role when you decide the transportation management company you want to work with. While bigger businesses often work with more than one 3PL transportation management company at a time, smaller companies typically just partner with one. That partnership means if you run a smaller business, you need to vet a company and make sure they’re going to maintain quality at an acceptable price.
So what should you look for in a transportation management 3PL? Take the following steps in your search:
- Locate a company with team members who care as much about their business as you do about yours. That says a lot about the service they’ll provide to you.
- Ask them for references. Who have they worked with in the past? Are the former customers happy with the service they received?
- Inquire about what kind of tracking systems the company uses. How visible will your shipments be to you?
- Find out about their investments in technology. Is this a company that’s looking at where the transportation management field is headed in the future?
- Learn about whether they’re financially stable. How long have they been making deliveries? Do they have a track record of surviving the ups and downs of the economy?
- If it’s an older, more established company that you’re looking into, determine whether they’ve adapted to the times.
- See if they can handle your global or national market plans. Do they understand issues like currency variations, state shipping regulations, foreign regulations and the best way to ship things through customs?
Take your time. Make a good choice. You won’t regret it. You’ll find the quality you desire and, most likely, the cost savings you were hoping for.
Mitchell’sNY Offers Quality at the Cost You Desire
If you’re looking for a 3PL refrigerated truck shipping company to move your produce or perishable goods anywhere in New York City or tri-state area, talk to us at Mitchell’sNY Logistics. Mitchell’sNY has been operating in New York City since 1946. We know the city and the tri-state area like the back of our hand, and we offer people a personal touch that you can’t find in larger 3PLs. We also have a record of on-time delivery that’s second to none.
We offer all manner of delivery services, from couriered messages to a white glove delivery service for those very special deliveries. But one of our real strengths is our temperature-controlled shipping operations. If you have perishable items that need to be moved across the city, anywhere in the tri-state region or even to another part of the country, we’ll give your goods the special attention they need at the proper temperature to make sure they arrive at their destination ready for customers to buy.
No matter what perishable good you need to transport, Mitchell’sNY will provide you with the best service and care. We’ll deliver your item — whether it’s milk, cheese, fresh vegetables or even biological tissue — on time and in great shape. If your order needs to go anywhere in Manhattan, we can give you refrigerated truck delivery within two hours.
We know how important your business is to you. We understand that when you’re looking at refrigerated shipping companies, you want to work with a company that cares as much about your product as you do. If you want to know more about how we can help you, or if you’re looking for up-to-the-minute information about our rates, you can contact our experienced and logistics team today. We look forward to working with you!