Inhouse vs Outsourced Logistics – Which Is Best?

Outsourced logistics

Simon Clifford, Director at Cygnia Logistics spoke with Modern Retail about the benefits of outsourced logistics. Here’s what he had to say:

Ecommerce and retail businesses often begin operations inhouse and manage their own fulfilment and logistics. This contributes to a sense of brand ownership and control. However, as businesses begin to scale up, problems with capacity can appear.

The COVID-19 pandemic has forced businesses to adapt, with significant disruption to supply chains and business models. Not only have they needed to keep up with evolving customer demands, but also had to manage the responsibility for keeping suppliers, customers, and teams safe. As lockdown eases, businesses are planning more strategically with more capacity to navigate change proactively and positively, despite continued uncertainty in the retail landscape. 

When to consider outsourcing logistics

Thanks to their ability to flex operations, reduce risk and free up time, space and resources, 3PLs can help businesses to focus capital expenditure on brand development and growth at pace, rather than a high fixed cost dedicated solution. Signs you may need to outsource your logistics include:

  • Difficulty managing rising customer expectations
  • A lack of space and time
  • A lack of resources to invest in training and systems
  • Limited worker capacity

The benefits of outsourced logistics

  1. Data accessibility – A 3PL will allow you access to the latest technologies, opportunities and insight to your industry
  1. More time – you will have more opportunity and resources to focus on scaling and recovering. 
  1. Opportunities to scale – 3PLs can support flexibly scaling up and provide access to new markets.
  2. Expertise – businesses will have access to expert guidance to allow them to deliver a high-quality, sustainable, omni-channel brand experience.
  3. Fresh ideas – 3PLs can provide new insights and ideas, helping to enhance competitive advantage.
  4. Higher value, lower costs – when working with a 3PL, 75% of businesses report a decrease in their operational costs.