Supply Chain Logistics: 7 Signs Retailers Need to Outsource Transportation Management

By Carlton Farr, Vice President of Supply Chain Services, Radial

As retailers navigate the intricacies of supply chain logistics, optimizing transportation management is critical. It’s a complex process that involves multiple business units including procurement, fulfillment operations, finance, and customer service all playing a role. It also typically requires multiple carriers, each with their own unique systems, pricing, and rules.

As eCommerce omnichannel shopping has increased, customer expectations for multiple, fast shipping options have expanded. Whether it’s through store fulfillment or traditional doorstep delivery, today’s consumers expect retailers to get their orders to them as quickly as possible. While it all happens behind the scenes for them, consumers rely on retailers to select the best carrier to get their order fast.

As they attempt to meet these expectations, retailers are tasked with managing the many challenges they face today—from inflation and labor shortages to higher fuel prices and supply chain disruptions. With so much at stake, retailers are feeling the pressure to provide customers with the convenient shopping experiences they want while simultaneously reducing costs and increasing profits.

It’s a delicate balance. Unsurprisingly, it takes a tremendous amount of orchestration to manage the complexity of the eCommerce fulfillment and delivery process. The pandemic dramatically increased online shopping, and many retailers find they have outgrown their ability to handle transportation management in-house. As a result, many have chosen to outsource transportation management to third-party logistics providers.

But how do you know if you need to make the shift to outsourcing this part of your business?

Here are seven signs that it is time to make the move:

1. Demand has outpaced your ability to deliver orders on time. Most in-house logistics and transportation management teams cannot scale fast enough (through hiring or additional shifts) to keep pace with the growing surge in demand. Adding new hires is difficult during a tough labor market, and most teams simply cannot manage the volume needed. This is especially true during the holiday shopping season when peak waves can be difficult to manage.

2. Your technology has not been updated and integrated to the cloud. On-premises and insufficient cloud transportation management systems (TMS) struggle to remain up-to-date and often do not integrate with other systems easily. This can cause blind spots and data silos in your supply chain logistics process, miscommunication with shippers, and a basic inability to meet the date-definite delivery promises that are made to customers during eCommerce checkout. It also makes it difficult, if not impossible, to have real-time visibility into your logistics operations. When you outsource transportation management to a trusted provider, you can count on meeting customers’ delivery expectations.

3. Customer experience is taking a hit. Customer satisfaction drops when there is a lack of visibility into the shipping and delivery process, and when deliveries fail to arrive on time. In-house teams that are overwhelmed by the transportation management process find that it’s increasingly difficult to meet customer experience KPIs and service level agreements.

4. You’re not getting the best rates with carriers. It’s difficult to get the best rates during contract negotiations with carriers if you’re using spreadsheets or do not have real-time visibility into the logistics functions and transportation services. If you’re working directly with carriers, you likely aren’t benefiting from the better rates you can receive when you outsource transportation management because of providers’ extensive relationships and volume discounts.

5. Your shipping costs are getting out of hand. Shipping is a huge part of an eCommerce business and, as transportation costs have increased along with a burgeoning demand for faster shipping, it’s easy for shipping costs to spiral out of control without a modern transportation management system or managed transportation by a service provider. In addition to managing shipping costs, outsourcing transportation management optimizes final mile delivery, increases speed to market, and meets the ever-evolving demands of consumers.

6. You need to focus on other core competencies of the business. Along with high costs, shipping consumes a ton of focus and time for eCommerce companies as they try to streamline supply chain logistics. This eats away at time that needs to be spent on the core business, such as product development, merchandising, sales, and customer care. The bottom line for many eCommerce businesses is that they struggle to perform multiple aspects of the business well and would see immediate benefits of outsourcing transportation management to an expert.

7. Peak season order fulfillment anxiety is keeping you up at night. Peak season is stressful under any circumstances, but when you’re worried that your transportation operations may not be up to meeting the high demand, it makes it even more challenging. Peak season is a high-pressure time for the eCommerce and supply chain logistics industry, and there is no room for error when it comes to keeping customers happy during the holidays. Having a trusted and dependable transportation management partner that will handle all the logistics details needed to achieve your goals during peak season is a solid strategy for success.

The Value of Outsourcing Transportation Management

With more than 11.7 million square feet of purpose-built fulfillment warehousing capacity, innovative robotic technology, and proprietary transportation solutions, Radial’s team of specialists source orders and send them to their final destinations with unparalleled efficiency—not just when orders are steady, but during high demand periods as well.

Whether shipping an order across town or to the other side of the world, Radial is a partner you can trust to get it there when and how your customers want it. Radial’s proprietary transportation management solutions enable eCommerce retailers to deliver orders to customers faster and more cost-effectively. Our logistics management experts work with reputable carriers, regionally and globally, to make sure retailers can deliver on the promises they make to customers.

Whether it’s a Wednesday in June or Cyber Monday, you can master the intricacies of supply chain logistics when you outsource transportation management to Radial. Learn more about taking your fulfillment and delivery operations to the next level.