Rising Logistics Cost Means Review Time

Posted on June 29, 2015 by

Rising Fulfillment CostsRecent articles on the economy are indicating the likelihood for increases in logistics costs for most organizations. According to a post on PYMNTS.com, this talk is turning into reality. Often we’re asked when the best time is for an organization to look to an outsourced fulfillment partner. Our answer is may surprise you; it is typically when your business and the overall economy are growing.

Why are “good times” when you should look for new options for your fulfillment activities? Here are our reasons.

  • We see clients hold back on investments during tough times and when things turn around it is usually too late to catch-up. Playing catch-up creates situations for missteps and paying much higher prices when building out your new infrastructure.
  • A growing economy creates pressure on supply. In the case of logistics, we’re seeing this in space, transit and resources required to support the demand. While this impacts everyone, this is especially a hardship for smaller shippers or those with highly seasonal demand.
  • The cost for space, fuel and labor will all experience increases that will be hard to manage if you don’t have the expertise to work aggressively to manage these external costs. This expertise coupled with economies of scale may allow you to lessen the impact by their ability to absorb these costs more efficiently and utilize more options to for cost leverage.

What should you do if you are feeling the pinch of these increases? Look for external experts or even speak with companies that are successful doing this for others – a quality third party provider. These experts can educate you on the potential fulfillment improvements and ways they can more efficiently manage your growing costs. Use the recent good news on the economy to look for potential partners or consultants that can turn your fulfillment activities into a more efficient operation. In the end, this will provide more value to your organization and your customers.