To outsource transportation, or not? Gartner identifies the benefits and cautions

ControlPay

January 11, 2016 - 09:10

Most logistics leaders and managers will face at some point the decision of whether to outsource a logistics function to a third-party logistics provider, or to keep it in-house. Gartner points professionals in the right direction by publishing the benefits and cautions associated with outsourcing the transport function.

Transport is the most highly outsourced and commoditized logistics function; 81% of companies surveyed outsource some or all of their domestic transport and over two-thirds of those businesses stated that cost reduction, and not customer service, is their No. 1 priority.

Top Three Reasons for Outsourcing Transport

1. Cost Reduction
2. Competency of Execution
3. Scalability

To help companies better differentiate between what skills should be outsourced versus retained in-house, Gartner has issued a new report, "Focus on Transport to Identify the Benefits and Cautions of Logistics Outsourcing." The recommendations gathered in this research are developed to help supply chain and logistics decision-makers to:

• Identify the benefits and risks associated with outsourcing the transport function.
• Determine how to retain operational transport knowledge as well as transport management expertise in an outsourced scenario.
• Understand the significance of a continuous improvement process in the transport function, regardless of whether the function is in-house.

Access the key insights: Gartner Focus on Transport to Identify the Benefits and Cautions of Logistics Outsourcing

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