This is the main question that every business owner asks himself at the start of his business setup. There are many benefits of in-house fleet and outsourcing them to a third party. Transportation management is a complex task, and not all companies can manage it independently.
In-House Fleet Vs. Outsourcing?
If you want to know which option will better you, keep reading on.
Benefits Of Outsourcing:
Outsourcing transportation has become increasingly popular over the last decade. Whether or not this option will work for you depends on several reasons:
- The type of business you own.
- The number of vehicles and assets within your third party fleet company.
- The skills and workforce available.
Therefore, it is essential to work on what you need and fill in the gaps. You should first ask yourself, can you tick each point?
When you think of a fleet owner’s responsibilities, you may get overwhelmed.
These can include:
Vehicle purchasing
- Vehicle sourcing and purchasing
- Vehicle funding
- Maintenance
- Procurement management
- Fleet administration
- Parking and fines administration
- Driver requirements such as license checking
- Driver training
- Health and safety checks
- Vehicle tracking and communications
- Vehicle breakdown and recovery
As a fleet manager, you will have to deal with these tasks daily. These tasks can be particularly tough for smaller companies as they don’t have enough resources. This may indicate that outsourcing may be the option for you.
Benefits Of In-House Fleet Management:
Now, let’s look at some benefits of in-house fleet management.
Managing And Monitoring Costs:
You and your trusted team know the inside out of your business. So, you will be more familiar with your company vehicles, drivers and resources as well. This can help you identify big problems. You can also come up with more innovative ways to overcome them. This means that you’ll ultimately save time and money for your organization.
You can also build relationships with your suppliers and other industry specialists to deliver service-level agreements and negotiated rates. This way, you can save on fleet costs and any unplanned downtime for your vehicles.
Looking At The Bigger Picture:
Outsourcing is a terrific choice when you need specific improvements. Especially if you’re looking for some specialized regions, if you consider in-house fleet management, you’ll be in a better position to see which specific area needs improvement in your transportation business.
This advantage is limited to you only because you have full access to your sensitive business information.
Therefore, a third-party manager will only favor achieving your pre-agreed objectives and goals. Only you can focus on the longer-term cost-benefit analysis to gain better targets for your organization.
FAQs
Q- What does outsourcing a fleet mean?
Outsourcing means engaging with an external third party, usually a specialist logistics service provider (3PL), to perform specific transportation activities. There are many advantages, but there are also real risks like any other type of business.
Q- What are some potential risks when Outsourcing your transportation?
There are several risks associated with outsourcing, some of which are given below:
- You don’t have proper control over everything.
- Sometimes, you are faced with increased costs.
- Loss of control means you sometimes have to compromise on the quality standards of your services.
- Sometimes, you also face breaches of confidentiality which is a significant con of outsourcing.
Conclusion:
If you are running a small operation just starting, you may benefit more from outsourcing. However, if you have a large company with an established process, you should consider an in-house fleet operation.
Also Read: What you need to know about dry van freight shipping?
