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Should You Outsource Your Transportation Needs?

Posted on July 21st, 2014 by AdmiralAl

Whether or not to outsource deliveries is a difficult decision for any organization. At first glance, employing a house driver may appear to be the most cost-effective solution — but is it really? You might be surprised to learn that for many companies, relying on courier services makes sense for a multitude of reasons.

Here are some questions to ask yourself when deciding whether to take care of your transportation needs in house or hire a courier service.

Is your in-house fleet an asset or a liability?

Cost will probably the biggest factor in your decision. If you are already doing your own deliveries, you should be able to calculate your overall cost and compare it to the cost of hiring a courier service. If not, you will have to estimate your cost of providing your own transportation.

When estimating costs, don’t forget that there are many hidden costs associated with operating a private fleet beyond the obvious expenses of fuel, vehicle acquisition and maintenance, driver and dispatcher wages, and insurance. Some of these include:

  • Training wages for both employee and trainer
  • Uniforms
  • Employee benefits
  • Recruiting costs
  • License fees
  • HR costs for additional administration and payroll
  • Unemployment
  • Overtime

Add these all up and you may find that courier services are an attractive alternative.

Will managing a delivery fleet detract from your core competency?

Even if an in-house fleet is a cost-effective option for you, it still may not be the best decision for you if it consumes time or resources better allocated to other aspects of your operation. Ask yourself who will be responsible for handling the following tasks:

  • Licensing
  • Recruiting
  • Driver training
  • Dispatching
  • Vehicle maintenance scheduling
  • Safety training and monitoring, including DOT compliance
  • Contingency planning
  • Vacation coverage and absenteeism

Don’t underestimate the disruptive effects of sick days, vacations, employee turnover or volume surges. The resulting driver shortages can throw operations into a tailspin and cause untold headaches for the remaining staff, who often must neglect their core duties in order to help keep deliveries on schedule. Such situations are stressful at best; at worst they can result in loss of business due to decreased quality of service.

Are you prepared to meet safety and compliance regulations?

If you are required to have a U.S. DOT number for your fleet, then you are subject to the Federal Motor Carrier Safety Administration’s (FMCSA) safety regulations for motor carriers, known as CSA (Compliance, Safety, Accountability). CSA enforcements make it difficult for small private fleets to stay profitable while meeting required safety regulations.

FMCSA and DOT regulations are complex, and failing to follow them can result in hefty fines. Established courier services are better positioned to keep up with safety regulations, because freight transportation is their core competency and they can devote more time and resources to ensuring compliance.

If you are looking for a courier service in the Chicago area, or would like more information to help you decide whether to outsource your deliveries, call us at 630-413-9158 or email info@bestmessenger.com.

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