Outsourcing vs. In-House Delivery

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Warehouse workers unloading a semi trailer at a dock

Delivery performance is a major contributing factor towards your business’ efficiency, growth, and customer satisfaction. While many businesses rely on their own employees to tackle the challenges of business to business (B2B) delivery, others look to hiring outside help to facilitate their deliveries. While one delivery option is not necessarily better than the other, they each have their advantages that are uniquely beneficial.

Understanding the challenges of B2B shipping can be insightful when determining which delivery method is best for your business. Let’s take a look at these challenges to determine the pros and cons of outsourcing and in-house delivery. 

Addressing the Challenges of B2B Shipping

Managing your business’ deliveries presents a variety of challenges that affect efficiency and your bottom line. Some of these challenges include:

  • High costs
  • Lack of tracking and updates
  • Poor technology
  • Inflexible scheduling
  • Inadequate manpower or equipment

These challenges not only pose a risk to the operation of your business, but they can have severe consequences to your customer’s satisfaction too. Outsourcing and in-house delivery each have unique solutions to the challenges presented by B2B shipping. To find out which delivery style is most beneficial to your business, you need to understand the pros and cons of each method.

What Outsourcing Delivery Means For You

Outsourcing can sometimes have a negative connotation, as it reminds people of large tech enterprises outsourcing work overseas. In reality, outsourcing is an increasingly popular method of improving efficiency and lowering costs.

Using a professional third-party shipping service can prove to be an invaluable resource when it comes to managing your business’ deliveries. The most flexible, timely method of outsourced delivery is hotshot drivers.

Image: A stack of boxes in a cargo van. Text: Outsourcing is an increasingly popular method of improving efficiency and lowering costs.

Crowdsourcing vs Outsourcing

Crowdsourcing is a type of outsourcing that involves the collaborative effort of many individuals to achieve the same goal. Crowdsourced delivery is when independent contractors are hired to ship for a business. This is uniquely beneficial because it allows for a business to have access to a large variety of professional drivers to meet specific demands.

Read our related article to learn more about crowdsourcing delivery and its benefits.

Benefits of Outsourcing Delivery

One of the most noticeable advantages of outsourcing delivery is a lower initial cost. By using a third-party shipper, like an independent hotshot driver, you don’t have to worry about hiring staff or purchasing delivery vehicles. This helps keep costs down in the long run too, as it minimizes the overhead cost of employee salaries and vehicle maintenance. 

Outsourcing delivery can be particularly beneficial for small and medium-sized businesses that don’t have a lot of extra capital to fund an in-house fleet. In addition to a lower initial cost, outsourcing your business’ deliveries comes with its unique advantages.

Image: A hotshot driver in the front seat of a cargo van looking at his job board app. Text: By using a third-party shipping company, you don't have to worry about hiring staff or purchasing delivery vehicles.

Less Responsibility

When using a third-party fleet of hotshot drivers, you can spend less time worrying about your deliveries and spend more time managing your business. Planning and managing deliveries requires a lot of your attention that can be better spent on other aspects of your business.

Professional third-party shippers have technologies that make it easy to plan and track your shipments. This way, you can quickly schedule your shipments without the unnecessary stress of fleet management and route optimization. 

Outsourced delivery also comes with less liability in case of an accident. Third-party delivery services have insurances that cover accidents and losses, which can ultimately lead to less of a financial burden for you. 

Greater Flexibility 

Another benefit of outsourced delivery is that hotshots have the manpower and equipment to accommodate your schedule. Even if you have an in-house fleet, you may not be able to accommodate unexpected deliveries. This is especially beneficial if you need to make a quick delivery in a pinch or during holidays and weekends. 

Disadvantages of Outsourced Delivery

The biggest disadvantage of outsourcing your deliveries is a lack of control over your shipments. This can be an issue if your third-party shippers don’t maintain your quality standards. You want to make sure that your deliveries are handled professionally and arrive on time. That’s why it is important to find an outsourced fleet that is reliable and works hard to meet your expectations.

Image: a yellow cargo van with pallets and boxes sitting behind it. Text: It's important to find an outsourced fleet that is reliable and works hard to meet your expectations.

The Pros and Cons of In-House Delivery

A business that has its own in-house delivery fleet has complete control over their delivery operations. This allows a business to avoid the shortcomings of unprofessional third-party shippers. With an in-house fleet, you personally know your drivers and the vehicles they’re operating.

Benefits of In-House Delivery

A company that has its own in-house delivery may prefer the freedoms that come with it. An in-house fleet equates to full self-sufficiency, and it allows a business to shape their delivery services to meet their specific needs. They can offer special incentives to their customers too, like free or reduced shipping. In-house delivery also promotes brand awareness, which is an important aspect of a business’ growth.

Disadvantages of In-House Delivery

While in-house delivery offers more freedom of a business’ delivery services, it does come with some drawbacks. Costs can quickly add up when starting an in-house fleet. A large initial investment is required to purchase vehicles and equipment, hire employees, and buy the necessary logistics technology. 

Also, the business is responsible for all of the risks associated with deliveries. This can include accidents, losses, and late deliveries. This can not only cause a financial burden, but lead to a damaged reputation for you and your company. 

Open Road—The Cost-Effective Hotshot Shipping Experts

Open Road provides simple and smart shipping solutions that help keep your costs down. Whether you’re looking to outsource your deliveries or supplement your in-house fleet, Open Road is committed to upholding your professional standards. 

We help a variety of industries deliver their shipments professionally and on-time, including construction, automotive, retail and many more. Sign up for free today and start shipping on your terms. 

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