Sometimes, if you want to save, you can … expose yourself to additional costs. When is it worth buying your own car fleet, employing drivers and carrying out your own transports, and when is it better to leave it to professionals?
As your business grows, you face many dilemmas. Isn’t it better to hire an accountant instead of paying the accounting office? Is the salary of an advertising agency not converted into a full-time job for a marketer? And finally, instead of using the services of an external company, should you start carrying out your transports yourself?
WHAT CAN BE GAINED?
This solution is chosen by companies for two reasons: it should be cheaper and more reliable. Cheaper, because transport companies earn money by carrying out transport for us. And more certainly, because we will cease to be one of many customers, and we will become an absolute priority for our drivers.
So the assumptions seem most sensible. When it comes to implementation, however, it turns out that you need to take into account several factors that may be elusive at first glance.
WHAT CAN YOU LOSE?
Own transport means higher fixed costs. Regardless of the number of transports, we have to pay our drivers and pay installments for the equipment. Do we limit flexibility to reduce expenses? Maybe it is in theory, but is not necessarily in practice. It turns out that we must have the right number of transports for the employed drivers and our fleet in order to pay off our own transport. When we have too few of them – the cost goes up. When we have too many of them – we have to add an additional car and a person, so the cost will go up again until we provide it with optimal loads.
In practice, it is impossible to maintain this level in the long term. To reduce costs, it turns out to be necessary to hire a freight forwarder who will reasonably plan the journey of your own trucks and provide them with external loads that will eliminate empty transports. Employing such a competent person is a considerable expense, but also the only chance that your own transport will actually turn out to be cheaper than outsourcing it.
In order to reduce costs and ensure reliability, it is also worth using modern solutions – telemetric systems and transport management software (we wrote about what we use here). Without it, it will be difficult to find a rate per kilometer comparable to the subcontractor, not to mention the timeliness of transports. In practice, switching to own transport means a jump in fixed costs in the name of potential benefits, which will not be easy to obtain.
COMPETITION IN A NEW FIELD
Own transport department requires in fact competition for efficiency with transport companies. Of course, it can be assumed that with sufficient effort, recruiting appropriate, competent people and equipping with modern equipment, you will turn out to be as effective as transport companies. The only question is whether to take such a risk? Isn’t it better, instead of building your own transport company within the company, to simply find a trusted partner who will provide quality transport services at a reasonable price?
Do you want to find out what terms of cooperation you can get at VEGA Transport? Send us your inquiry to order@vega-transport.com. You will quickly find out that cooperation with us will provide you with most of the benefits of having your own transport, without unnecessary risk.
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