Reasons why small businesses outsource logistics services

Business owners need to be resourceful and smart in order to grow their businesses well.

Small business owners face increased pressures due to the lower resources such as capital to compete in the markets. It is a myth that small business owners must try to do everything themselves so as to save costs. The smart business owners will try to outsource or hire people to delegate tasks away (especially the less important or tedious tasks).

Logistics is one such tasks. Handling logistics is not easy, and requires careful planning and dedicated resources. In Singapore, it does not make much sense for small businesses to rent or buy vehicles due to the high costs of such vehicles. If the small businesses do not have much logistics needs, all the more they should outsource their logistics work to logistics companies. This will save them cost and trouble of managing the logistics operations.

In particular, the type of logistics services that small businesses normally need to outsource is the courier services which takes care of the delivery of small and medium sized items. This article explains the advantages of using logistics services for small businesses really well.

In summary, these are four good points that the article mentioned
1. Small business owners, especially with limited manpower, might be tempted to try and handle as much things as they can. However, it can get counterproductive really fast. They should focus on the most important tasks and get the tasks fulfilled. Leave the easier tasks to someone else.

2. The top reason for which small business owners choose to outsource courier services is due to the fast delivery speed. If business owners carry out the deliveries using their internal resources, their delivery speed will be no match to the courier companies which are very experienced and expert in logistics. Ensuring a fast service can be a critical factor, even more so if the businesses requires same-day deliveries.

3. Moreover, on the point about pricing again, couriers work either on a flat-rate basis or implement a pricing per mile. In addition, the courier companies enjoy “economies of scale” as they offer their services to hundreds of other clients. As a result, they will be able to maximize the return on their resources, and pass some of these savings on to their customers.

4. Courier companies insures the delivery of the parcels too. This means that in the event packages sustained any type of damage or gets lost, the customer will be compensated accordingly. If something goes wrong with the delivery while handled internally, the businesses will bear the loss themselves without any insurance compensations, unless they purchase insurance plans which is highly unlikely.

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