By Walter Scremin, CEO Ontime Delivery Solutions.
Household names Kogan and Maggie Beer recently made the decision to move some of their delivery transport in-house, and many small businesses are considering ways to create a more reliable delivery service. But is in-house delivery transport likely to produce results?
For some, in-house delivery will be a masterstroke. For others, a total nightmare.
Let’s consider the pros and cons for small business.
More control over your delivery systems
A dedicated, in-house solution should provide more efficiency and control over costs – in theory. Many small businesses achieve this by outsourcing most of their requirements to specialist delivery transport suppliers, an arrangement which should provide more flexibility and control, not less.
The greater control over processes gives you the opportunity to improve customer service. Some small businesses even take the opportunity to incorporate company branding – remembering that the parcel delivery is often the only in-person contact with the customer (branding can also make your business look professional, and larger than it actually is).
More responsive to customer needs
This is particularly important if you are in a time-sensitive industry where your customers will seek out the fastest, most responsive delivery options. Aside from being able to respond faster, there should be capability to handle difficult, delicate, awkward, or oversized items – most couriers and the national carrier struggle with anything different from standard parcel sizes.
Costs blow out
It’s very easy for costs to blow out with in-house delivery. Those literally building their own in-house fleet from scratch will incur massive up-front expenses and fixed costs. Those who choose to outsource instead may also have trouble keeping a lid on expenses if they do not already have an intimate understanding of their delivery costs.
To truly understand the financial benefits and risks, you need to unearth the myriad hidden costs involved in running a delivery fleet.
Wasted management time
If parcel delivery is not your core business, managing a delivery fleet will introduce several headaches. And there’s no guarantee running your own show will solve widespread recent issues such as driver shortages.
It’s easy to waste huge hours on putting out spot-fires, dealing with unexpected problems, maintenance issues, traffic accidents, WorkCover claims, or last-minute absentees. Wasted management time is a common and major hidden cost of going in-house.
Success will mainly come down to how the in-house parcel delivery service is structured, and how much you can understand the major costs involved in running delivery services.
Taking the leap into in-house delivery transport can be intimidating, but the rewards are there for those who get it right. Don’t be afraid to ask any potential suppliers the hard questions about how they can make your business better and keep your costs under control.
Also don’t be afraid to start small to test the waters – it’s best to trial a transport supplier before jumping into a major commitment. Be prepared to try new things and measure success. The delivery gods smile on those who make the effort to understand their costs, processes and needs first.