An important consideration when shipping cargo internationally is understanding what are outsourcing logistics. Outsourcing is when a company or shipper uses an external provider to provide services typically done in-house. Although outsourcing can happen in the same country, it commonly occurs in outside countries. These services can include manufacturing, operations, shipping, and other tasks. While certain businesses delegate specific functions to external sources, others transfer the majority of processes. With e-commerce and globalization growing rapidly, the need for outsourcing has also risen. This article will explain the benefits and challenges of this logistics model and focus on international shipping.
What Are Outsourcing Logistics And Why Do Shippers Outsource?
While there are numerous reasons that a shipper outsources, a common purpose is to cut costs. For example, a company that makes and ships a large quantity of goods typically has many expenses. Workers in other countries can cut production costs, allowing the company to make more goods. When shipping the finished products internationally, outsourcing the process also has monetary advantages. Expenses from owning and maintaining a carrier pile up over time as shipments grow. Likewise, in domestic transport, using an outside trucking company is cheaper than maintaining a fleet of trucks. Another benefit of outsourcing is the potential for expandability and scalability.
One of a company’s main goals is expansion, and outsourcing is one of the best ways to achieve this. As the volume of shipments increases, the ability to meet the demand becomes more challenging. Using a separate logistics company that can meet customer requirements allows quick scalability. Utilizing a third-party fulfillment center with storage and last-mile delivery enables a company to scale. Along with scalability, flexibility becomes possible when a business can quickly downsize or upsize operations based on market conditions. There are also many regulations that shippers have to follow when bringing in goods from other countries. Outsourcing importation to customs brokers is ideal for simplifying the customs clearance process.
What Can Be Some Disadvantages Of Outsourcing?
While outsourcing has various advantages, this logistics model can also have challenges. A typical issue is the decrease in communication that can arise from many parties involved in a shipment. For example, using a carrier company to move your cargo means that the shipper has to contact the carrier when issues arise. Poor quality carriers can be challenging to reach, which can be a problem in an emergency. Outsourcing can also cause other issues, such as a loss of control. Part of a supply chain goes to another party; if a mistake happens, it goes directly to the shipper. In extreme cases, the third party can commit cargo theft or any other offense.
Despite the challenges, numerous businesses outsource due to the value it has. A shipper must ensure that they find qualified carriers to move their cargo. Shippers can do this with the help of a 3PL (third-party logistics) provider. 3PLs match the sender of a shipment to an ideal carrier that can complete the transport. They also provide other services like warehousing, order fulfillment, reverse logistics, etc. To begin outsourcing, contact A1 Worldwide Logistics at 305-821-8995 to speak to our 3PL exports regarding starting. Along with a focus on transparency and reliability, we have numerous solutions for your supply chain.
