Top Myths of Logistics Outsourcing

Time and technology have a way of slowly erasing methods and industries of the past. The supply chain, however, is here to stay. While time and technology have kept the supply chain, they have called for new and innovative forms of transportation management. One such form is logistics outsourcing. Still the idea of outsourcing logistics is often equated with lost autonomy and control, and with more solutions providers in the market, it's time to understand the real facts.

A September 2021 press release found that “supply chain management (SCM) market solutions revenue totaled ~US$ 19.5 Bn for 2020 [...and] is expected to reach ~US$ 62.6 Bn by 2031, growing at a CAGR of 11.4% for 2021 – 31.” Logistics managers might look at these numbers and wonder how much could have been saved by optimizing logistics. Poor scheduling and miscommunication can be detrimental to the shippers’ customer experience.

Shippers don’t have to try to manage this all on their own. Outsourcing to a freight broker is a viable option, despite the misconceptions and myths that are out there. Let’s look at the top five myths of logistics outsourcing and discover the reality of partnering with the right brokerage and where control really rests.

Myth 1. Logistics Outsourcing Relinquishes Control

One of the primary reasons shipping companies become their entity is to maintain control over their logistics operations. Doesn’t outsourcing logistics defeat the purpose of that?

In reality, shippers who outsource logistics have an extension of their team by working with a third-party logistics (3PL) partner. A quality freight broker will take on the vision and goals of the shipper to provide them with access to more carrier capacity and innovative solutions. Doing so preserves the shipper's workforce and time for more critical work.

Myth 2. Costs Will Go Up

While the exact cost reduction will vary from shipper to shipper, freight brokering is more than the rates. One of the most significant advantages of outsourcing logistics is the time saved working with a 3PL. With less time spent contracting carriers, shippers can focus on gaining new clients and harness inventory management wisely for maximum operating margin.

Myth 3. Customer Service Falls Short

“But won’t outsourcing logistics services remove the opportunity for real-time customer service?” Many fear that the literal and figurative cross docking done by adding in another team will widen the cracks for customers to fall in. 

With a premier freight broker, the expectation is over-communication. This added layer of communication and carrier accountability provides both the shipper and the customer with support from order fulfillment to reverse logistics. 

Myth 4. Brand Reputation Is at Stake

The rise of digital marketing and the digital consumer has shown that one bad review can significantly impact prospective customers. “Why trust my brand reputation in the hands of someone else?”

Integrity-based freight brokers, such as GEODIS Capacity Solutions, take a partnership mentality to their shipper and carrier relationships; “We succeed when you succeed.” The right partnership will add brand value by offering comprehensive services previously incapable of their capacity.

Myth 5. Customers Will Know We're Outsourcing

Companies that are mainly well-known within their region will need help with logistics outsourcing. Would it remove their credibility? Will it complicate what they’re able to offer to their customers?

3PLs often take a white-label approach, meaning they take on the branding of their shippers when transporting freight to provide a united front. This is especially important for companies that want their growth to match expanding freight brokerage capacity. Other shippers take the forward approach by telling their customers about all the benefits a third-party logistics partnership can offer.

Improve Growth and Recovery in Logistics With GEODIS Capacity Solutions

Outsourcing logistics frees up managers and team members to focus on the more critical aspects of the business. Shippers who improve company-wide productivity starting at the top, mark their real estate within the industry as efficient, successful operations. 

Logistics outsourcing enables the pros to handle the technical and challenging side of logistics. Capacity Solutions by GEODIS enables shipping and forwarding companies to focus on what they do best. Improve your operation and gain company resiliency by reaching out to Capacity Solutions today!