Trucking Company vs. In-House Transportation: Benefits of Each

It seems lately that more and more businesses are bringing extra responsibilities and processes in-house, instead of outsourcing the work to 3rd party vendor partners that provide specialized services. In this particular scenario “trucking company vs. in-house transportation” there’s a complete divide between companies preferring to own a private fleet for ultimate control, and saving the time in outsourcing. And on the contrary, the other half of the split see the benefits in outsourcing to a transportation provider to completely eliminate fleet maintenance and to gain an extra degree of flexibility and capacity.

So, is it better to conduct an in-house fleet of trucks? or take the stress out of the equation and outsource to an established trucking company? With our vast amount of knowledge and tens of years of experience in supporting businesses with their every logistical need, we have put this blog together to help you make a well-informed decision for your business by outlining the pros and cons of both. Ultimately this decision will have a huge impact on your operational costs, efficiency and your bottom line, making this a huge decision to make for your business πŸ˜…!

Pros of Outsourcing to a Trucking Company βœ…πŸ‘

1. No Large Up-front Costs

Renting, leasing or buying your own fleet requires a large amount of capital upfront investment into vehicles and infrastructure. When you outsource this side of business to a trucking company you can eliminate these costs and simply pay for the services when you use them.

2. Expertize In All Things Logistics

Transportation solutions are a trucking companies forte. They possess the knowledge, experience and resources to optimize routes, handle complex deliveries and navigate regulations. Therefore, you won’t have a worry in the world when you lean on a shipping partner, they’ll handle everything!

3. Scalability & Availability

There’s no worries about fleet expansions or reductions when you outsource logistics. Because you can simply scale your transportation needs up or down based on demand without the worries of potentially expanding your fleet at a large cost when demand could dip soon after.

4. Wide Network of Connections

With a wide network and vast amount of connections trucking companies are able to offer and fulfil a wide range of services and fast transit times. Without these connections, you may struggle to find the best solutions for your freight.

5. Reduced Liability & Predictable Billing

Trucking companies obviously take on the responsibility of their vehicles maintenance, insurance, driver management and liability of damages, etc. This is a HUGE benefit of outsourcing to a transportation company, so you don’t have to worry about any of these costly processes.

Cons of Outsourcing to a Trucking Company βŒπŸ‘Ž

1. Variable Pricing

Like with any service you pay for, you’re not in control of the cost. While there’s still wiggle room for negotiation on rates, the price is ultimately set by the company you outsource with and these pricings can change with seasonal demands, fuel fluctuations and other variable conditions.

2. Communication

Now, if you choose a partner like us at PEI then this isn’t a con at all! However, we do still realize that in some cases, poor communication can be a downfall when outsourcing any service. But building a strong relationship with your transportation partner can be the key to smooth operations and clear communication.

Pros of In-House Transportation βœ…πŸ‘

1. Control

With your own fleet of trucks, comes an unparalleled amount of control. Over things like shipping schedules, routing and handling of your own goods.

2. Brand Advantage

Having branded trucks on major highways, transporting your goods keeps your name and brand in peoples minds. It’s no coincidence that the branded trucks we see most regularly on the roads are the most popular companies. Your trucks essentially becoming moving billboards, boosting brand visibility.

3. Flexibility

In the case of a real emergency shipment arising, you can react quicker if you have a fleet sat waiting to be used. Instead of having to arrange with a transportation company and then them pick up the freight and move it. It’s simply ready to go when you are with your own fleet.

Cons of In-House Transportation βŒπŸ‘Ž

1. High Initial Investment

Purchasing and maintaining a fleet is extremely expensive. You don’t just simply buy trucks, you need trucks, trailers, maintenance facilities, insurances, fuel and teams of drivers as a minimum. So as you can imagine, the costs rack up pretty quickly.

2. Ongoing Overheads

Regardless of how much use you’re getting out of your trucks, you will always have ongoing overheads as long as you own them. During slower periods when demand is down, you’ll still have to pay for maintenance, truck payments, drivers salaries, insurance, etc.

3. Limited Capacity

The size of your fleet might limit your capacity. Sudden spikes in demand of your freight, might become difficult to manage.

4. Risks

Accidents, breakdowns and driver shortages could have a direct negative impact to your operations and in the long run, your business.

5. Unexpected Delays

Now, these are always a possibility whether you outsource or not. However, like we mentioned earlier trucking companies usually have a vast amount of connections and large networks. These are both things that can be extremely helpful when an illness like the ‘flu’ spreads throughout a business as they can all lean on each other to get the jobs done. But would your business be able to manage workload if the flu spread through your truck drivers if you had your own fleet? Or would something along these lines put a huge strain on your business?

6. Regulation Compliance

Managing a private fleet is not as straight forward as you might think. You’re then in charge of all aspects of transportation including, staying up to date on rules and regulations, route optimization, all back office complaints and insurance claims, etc. Essentially you’re reliable to keep your fleet safe, compliant and all legal aspects.

Hybrid Option

Many businesses find the best way to operate is taking a hybrid approach (a combination of the two). In this option they’ll perhaps maintain a small in-house fleet to carry out any critical, time-sensitive or specialized shipments and then outsource the bulk of their jobs to a 3rd party trucking company. This creates a very strong hybrid solution to reap the rewards of both work models. So always bare this one in mind!

But to Conclude…πŸ€”

There really is no one size fits all solution to the trucking company vs. in-house transportation debate. Taking your own businesses needs into consideration and weighing up the pros and cons of each are key to making the best decision. Don’t forget to explore the possibility of hybrid solutions and remember that your number 1 goal is to choose the transportation option that most effectively supports your business, in respect of time, monetary wise and effectiveness. β°πŸ’°πŸ˜Š


So do you need help with any of your specialized shipments?

At PEI we’re experts in dealing with specialized freight and can handle yours with any custom requirements.

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