Business

Transport subcontracting: focus on the advantages and disadvantages

.Subcontracting transport can be a particularly advantageous organizational solution for companies, regardless of their size or the importance of their resources.

Calling on a subcontractor for the delivery of its goods seems obvious and unavoidable for a company in the start-up phase of activity. But, this outsourcing also has many advantages for larger companies. However, it is important to choose your subcontractors carefully. Focus on transport subcontracting : advantages, disadvantages, how to go about it…

What is subcontracting in transport?

Subcontracting is a process by which a company delegates all or part of certain tasks or missions for which it is responsible, to a service provider named subcontractor. The commissioning company is called the principal. The two entities then sign a subcontract to formalize the partnership contractually.

The objective of subcontracting is to entrust all or part of the operations which are normally the responsibility of the principal. The forms of outsourcing in transport and logistics are diverse:

it can be a one-off outsourcing, to deal with an unforeseen event Wyoming Truck Dispatching Services or a temporary increase in activity.

In a case of outsourcing the transport of goods , the service provider ships goods on behalf of a third-party shipper. He can even take care of the implementation of administrative formalities, transport and customs documents.

If it is a freight forwarder, then the latter often contracts itself with other subcontractors, who are carriers. The freight forwarder, on the other hand, offers a unique solution, which includes full support for transport operations.

The advantages of outsourcing freight transport

Choosing to outsource transport offers many advantages to professionals.

Expertise: the external service provider chosen is necessarily a specialist in its field and in taking charge of the tasks and missions that you entrust to it. By subcontracting the delivery, you therefore compensate for your lack of knowledge and experience. By relying on specialists, you benefit from experienced experts, who are used to dealing with such and such a situation.

Flexibility: by calling on external services, it is easier to take advantage of flexibility (to modulate according to your needs and the context, in the event of a peak in activity for example, or to end the service).

Transformation of fixed costs into variable costs: with the outsourcing of transport, you will not have to assume the costs related to the transport of goods (trucks, salary costs for drivers, etc.) if you do not need them. Fixed costs become variable costs, adjustable in case of low volumes. If the quantity of products to be shipped is low or irregular, it is therefore a source of savings and a guarantee of financial stability for your company.

Stay focused on your core business: thanks to outsourcing, it is easier to focus on your activity and not on peripheral operations. You have the opportunity to devote more time to your strategy, your development, the launch of new products or services, which are profitable thoughts.

Fewer responsibilities: with the subcontracting of the transport of goods, you are simply the ordering party.

The inconvenients
Despite all these advantages, subcontracting transport can be complicated on certain points:

The price: of course, outsourcing your logistics has a significant cost. It is therefore a parameter to take into account by carefully assessing your needs upstream.

Distrust: it is sometimes difficult for a business manager to leave goods or stock in the hands of a third party. This can be experienced as a loss of control and mastery of the supply chain. To reassure you, rely on the contract . Traceability tools can also be useful for tracking all links in the chain.

Reputation to look after: this is one of the obstacles to outsourcing. By using a subcontractor for delivery, you let someone else be in contact with your customers. He therefore conveys your image through his performance.

How to choose the right delivery subcontractor?

Use common sense to choose your transport subcontracting partner.

Start by checking the reputation of the quality of the work of the speaker. You can simply look for information on the Internet or favor word of mouth and recommendations. Also judge the transparency of your interlocutors in terms of clients and past achievements.

These quality criteria begin with the first exchanges. The logistics subcontractor must be able to answer you clearly and quickly.

Finally, the chosen subcontractor must be in excellent financial health for a serene partnership. He must be able to assure you of the balance of his accounts and the sustainability of the company. Instability may jeopardize your own operations.

Conclusion: for or against transport outsourcing?

To absorb the management of logistics activities (hiring of staff, purchase or rental of equipment, investment in heavy-duty vehicles, etc.).

It’s up to you to assess the advantages and disadvantages of subcontracting transport according to your own situation.

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