Most manufacturers and vendors do not have the resources to ship out products, due to the cost of purchasing vehicles, the labor, insurance, and maintenance crew that are required to keep a fleet moving seamlessly. The other issue to consider is whether you have enough products that fill a truckload for shipping.
The wonderful thing about a third party logistics company is that they allow you to make shipments that are less than a truckload or truck full. The benefit of using a logistics company is that they coordinate the shipment from loading to arrival. Because of the sheer volume of shipments that flows through their organization, the company has the benefit of being able to negotiate rates and get much better pricing than an independent manufacturer that cannot compete with a larger shipping company. You also do not have to deal with insurance, security, or the volume of paperwork that is required especially if shipping overseas.
There are a few drawbacks, though. The first is that you do give up control once the merchandise leaves your facility. It is now in the hands of a third party logistics company as well as the carrier. Another drawback is that the shipments take longer to arrive to their destinations, because you now have to wait until the trucks pick up all their loads and fill the trucks before arriving to their designated destinations.
Despite the inconveniences, the benefits offered by a third party logistics company it can more than out way the drawbacks when you have less than a truckload.
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2 comments:
The eternal conflict: manage your shipments yourself and keep control over the entire process, or give up some of that control to a third-party vendor for the resources savings. This decision is best made by committee. That way all aspects and opinions are considered before outsourcing operations.
Absolutely true.
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