Managing the delivery transport function is a costly and often relentless challenge, whether you are a multinational conglomerate or a small business.
Most companies outsource at least some of their transport requirement, and some outsource the entire operation.
While this promises greater efficiency, the reality can be variable.
Transport may have become more sophisticated, but in many markets smaller transport providers have proliferated over the last 10 years, creating a huge variance in sophistication and professionalism.
The potential for error in choosing a supplier is acute, and the consequences of a poor choice may be long-lasting, tarnishing customer relationships, denting your reputation as a company, and creating a logistical nightmare.
What are some keys to success in outsourcing your delivery transport? In my 30-plus years as both a supplier and a buyer of outsourced services, I believe the following may help to make the right choice:
Expect more control: Outsourcing should provide you more control, not less. It’s not just about taking liabilities off your books; it’s about accessing the tools to be more agile and responsive.
Much of this control will come from the flexibility to increase resources – or scale back – at short notice. Beware any outsourcing deals which try and lock you into inflexible arrangements. And look for suppliers which have the size and experience to respond to your business when you need it.
You’ll know you’re on the right path with any new transport partnership when the control is in your hands. If you feel less in control than previously, it might be time to review the arrangement. More control should not be a luxury or an add-on, it should be a basic expectation from outsourcing your transport.
Approach it with a growth mentality: Many businesses which successfully outsource bring a growth mindset to the arrangement. They see not just a chance to manage costs, but an opportunity to try new things, such as new delivery routes.
It’s tempting to see outsourcing as just a cost-saver, to take liabilities off your books and outsource certain risks such as accidents, breakdowns or WorkCover claims. But outsourcing’s greatest benefit is often the opportunity to grow your business.
Trialling new delivery runs is a costly exercise if you invest in your own transport resources. By outsourcing, your business may try a new delivery run for a while, at a much lower financial risk if it doesn’t work out.
If the new run does work, you might just be using outsourcing in the most powerful way imaginable – to grow and improve your business.
Understand all the costs first: Delivery transport is a potential money-pit if you’re not across all the costs, yet these costs are often hidden and need to be brought into the open.
Any business which can isolate and know all the costs involved in transport will be in a great position to understand the financial benefits and make a better choice in outsourcing their transport.
Finding the true costs often involves asking some hard questions, and may be improved using cost analysis technology, which is both impartial and revealing. Once you know this, the value in an outsourced arrangement becomes clearer, and easier to measure over time.
Start slowly if you have to: Many businesses have successfully implemented an outsourced transport program by starting small and then scaling up – dipping your toe in the water before taking the plunge.
This avoids potential problems which occur when you rush into a big commitment, such as trying to backtrack from a bad decision, and issues with breaking contracts.
Not all transport companies will encourage this approach. Some will try and pressure you into a bigger commitment. But many will be happy to start small and build trust first.
Consider the relationship: You’ll have regular contact with your transport supplier, and the relationship becomes critical. It’s not much different to hiring a new manager or a new team. Yet many companies don’t put the same time into getting to know a potential supplier as they would a new employee.
Business is always more enjoyable and more productive when you work with people you like. Get to know your potential supplier a bit better. If the working relationship has good potential, your results are likely to be optimal – giving you more control, more efficiency, and happy customers.
Walter Scremin heads up national delivery transport firm, Ontime Delivery Solutions. He has more than 30 years’ experience in logistics and is passionate about solving logistical problems by focussing on efficiency and technology.
By Walter Scremin