Fleet management, including handling drivers, routes, and deliveries is an increasingly complex and demanding challenge for businesses. Customers expect speed, efficiency, and real-time communications; while increasing competition means that companies must also control costs, improve efficiency, and streamline processes to remain competitive.
In this environment, many companies are exploring the possibilities presented by outsourcing fleet management to a third-party provider. A rise in third-party delivery services such as Uber, Lyft, or Postmates has created more options than ever to businesses interested in outsourcing deliveries.
It may seem at first look that outsourcing fleet management offers more advantages than disadvantages, however, outsourcing your fleet management means relinquishing control of the employees making deliveries. Often, these are the only people that the end customer interacts with face-to-face. Additionally, there are solutions available today, like route optimization software and delivery management software that make it easy to increase profits from maintaining a fleet of in-house drivers.
Here are four more ways that outsourced delivery services could cause problems for your business:
1) Delivery Volume and Item Exclusions
A third-party delivery company often has exclusions to the products that it will consent to deliver, taking those decisions from the enterprise itself and potentially causing conflict or challenges down the line. Third-party exclusions may also include the number of items or weight that drivers can carry at a time, which may interfere with the most efficient organization of deliveries for the company.
2) Lack of Data and Insights
A company that outsources delivery also loses control over the knowledge, data, and decision-making associated with the fleet. The business only has access to delivery data that the third-party provider chooses to share, limiting insights and opportunities for improvement. Direct communications with drivers are limited or non-existent, complicating messaging to customers looking for real-time updates to delivery information.
3) Third-party Delivery Service Must Profit First
The cost savings that outsourcing services promise will arise from economies of scale are belied by the fact that a third-party delivery service must maintain a profit margin on the delivery itself – the delivery is their product. An in-house fleet, instead, can operate at a negative margin if necessary, as profits are centered on products delivered, rather than the actual delivery.
4) Lack of Accountability
Finally, outsourcing fleet management does not result in outsourcing accountability. A company is still responsible for order fulfillment and customer satisfaction, regardless of whether specific functions are outsourced or not. But outsourcing fleet management can result in a disconnect between the company and the customer: and a third-party provider may not be as focused on anticipating and resolving delivery-based issues and maintaining corporate standards and culture as the company itself
With route optimization software, a company can optimize driver routes and communications, improve efficiencies, control costs, and gain access to data for valuable insights, benchmarking, and ongoing improvement. A business can achieve many of the benefits of third-party deliveries while still ensuring that decision-making, data insights, and customer contact remain in the control of the core company by using route optimization software to help organize and improve fleet management.
Contact GetSwift today to learn more about how they can help you improve the performance of your in-house driver fleet.