Category: Logistics

Topic: Freight

Outsourcing Business Processes: Transportation OBP

Outsourcing Business Processes: Transportation Outsourcing

An outsourcing method to subcontract business processes to allow businesses to focus on primary activities. Third-Party companies that focus on specific areas will handle the process for a company. The method is becoming increasingly popular to improve bottom-lines for small and large businesses.

Outsourcing Transportation Processes

One area for Business Process Outsourcing is in the supply chain. Transportation is a common area to outsource, as it requires heavy assets and investment to host the operation in-house.

Recently, there is a rise in handling transportation through Third-Party Logistics Providers instead of going to asset-based carriers. According to reports, in 2000, only 6% of all trucking freight was handled by freight brokerages. Today, that number is over 20%.

Advantages of Transportation OBP

 A couple of factors that make transportation OBP attractive:

Flexibility in Carrier Sourcing

The last couple of years has shown the need for flexibility in transportation programs. When capacity is lower, being able to pivot to other carriers needs to be easy. Third Party Logistics Providers allow for quick pivots and access to more carriers. 3PLs may also provide extra security with carrier vetting tools to catch bad players.

Lower Freight Administration Costs

Administrative costs for freight transportation add up. Auditing invoices, contract negotiations, and freight claim resolutions are time-consuming, but important tasks. Outsourcing these processes to an outside company helps alleviate admin costs and help to save shippers money.

Easier Access to Costly Freight Technology

The freight industry is adapting new technologies to help lower operational costs. However, technology may be costly for independent companies. Transportation Management Systems (TMS) are a good example of costly subscription software that is vital to shippers. TLI’s managed transportation solution offers the TMS software product in its existing scope of work without shippers having to commit to a costly subscription model. 3PLs may allow access or have built a free TMS for your business. Business Process Outsourcing to a 3PL Brokerage alleviate costs since those firms pay for the technology.

Expert Advice and Consultation

On top of the relationships, services, and technology, partnering with a Third-Party Logistics Provider allows for expert advice in situations. When entering unchartered territories, it’s nice to have an expert who has been there. For example, shippers have requested heat maps for distribution center placement, along with modeling of freight cost associated with shipping from various areas of the country when running analytics on raw material vendors freight cost. Freight brokerage experts offer insights into uncommon problems and generally provide the best options in uncertainty.

Partner with TLI for Logistics Business Processes Outsourcing

TLI has partnered with businesses since 1994 to improve business transportation processes. Our state of the art ViewPoint TMS and back-end support staff give small to large businesses the confidence to outsource processes.