Reasons Outsourcing Transportation Management Will Improve Your Logistics Operations
Outside of a pandemic or natural disasters, you rarely see an empty shelf at a grocery store. Do you know why? Products are supplied and transported quickly, almost every day and shelves are kept fully stocked. This is all made possible though transportation management.
Transportation Management involves the organization of all logistics needs and requirements, from production centers to warehouses and to end-delivery centers. Managing stock levels not only applies to grocery stores, but to e-commerce and businesses of all sizes.
When considering e-commerce and small businesses, improved logistics is an integral component for growth and expansion. By outsourcing logistics operations, all businesses can positively impact their supply chain. Businesses outsource their transportation operations to third-party logistics (3PL) providers to increase real-time logistics visibility, improve efficiency, and reduce the costs of managing an in-house logistics team.
Key Processes Enabled by Transportation Management
Transportation management outsourced through a 3PL provider creates a more centralized and efficient network of distribution. When a 3PL manages freight transportation, they plan a process by focusing on real-time supply chain information, which helps them consider all critical metrics and parameters – such as costs, routes or number of stops.
Outsourcing all logistics operations also ensures an effective plan of action. A 3PL can analyze an entire supply chain and use this information to help businesses with shipping and stock information. They can even help with cost control because of their network resources and negotiations.
The Need for Transportation Management
The broader goal of outsourcing transportation is to do more than just move goods. It even brings long-term value for customers. Ultimately, allowing them to focus on their business’s core competencies and not letting their logistics program steal their attention.
In addition, there are a number of reasons businesses should outsource their transportation management. Some examples include:
- Minimizing risk due to operation efficiency and expertise
- Providing an increased network of resources
- Adapting to the business’ growth and expansion
- Creating a high-visibility logistics network
- Improving demands and reducing shortages
- Setting an emergency plan
- Analyzing the market for planning
Core Benefits of Outsourced Transportation Management for Businesses
The impact of transportation management for businesses is substantially positive because of the many benefits.
Flexibility & Productivity
Supply chains demand attention on relationship building with vendors, suppliers, carriers, and other related roles. With an outsourced transportation management program, this becomes easy. A 3PL will manage these relationships and they have the necessary expertise to make wise business decisions to keep your supply chain running.
Improvements in Logistics Results
3PLs improve results in the supply chain due to their extensive knowledge and use of best practices and advanced technologies. 3PLs improve their processes, set contingency plans, and analyze drawbacks in order to eliminate any risks. Their communication networks are also diverse as they have the ability to better negotiate with suppliers, and acquire the resources needed to push transportation efficiency.
Information & Technology
3PL providers use a broad range of information and technology systems uniquely geared towards the logistics industry. Data related to rates, carriers, route management—all of this information helps them manage the supply chain. This data can then be used for records and reporting, and passed along to the end-user. Thus, allowing the customer to better plan for the future and increase decision-making processes.