Insights

Outsourcing Your Logistics: The Importance of Maintaining Supply Chain Visibility

Peak Season is getting closer, and this year, some big-name retail chains are reportedly trying something new: selling their logistics and fulfillment services to other shippers. Thanks to sustained supply chain hurdles and a continued demand disparity, many retailers are lowering their projections for the rest of the year, as inventories continue to remain high and goods sit idle in warehouses (or warehouse alternatives). But in addition to selling their normal product lines, a few companies are now betting on their own shipping experience and infrastructure to boost profits in Q4. Since they already store and ship their own items, they believe they might be able to help other smaller companies do the same . . . for a price.

And there are plenty of businesses that might be interested. Companies looking to outsource their logistics needs is nothing new. As supply chains have grown in scale and complexity over the past few decades, numerous 3PL’s and logistics software offerings have cropped up to meet the increased demands, allowing businesses to focus on their core competencies. But, as with any new technology or service, there are concerns about these new offerings from the retailers. Given that these companies have never handled multiple accounts before, the main concern is: What level of supply chain visibility will these services be able to provide?

It’s a great question, and prospective clients are right to be nervous about the answer. Transitioning to a new logistics platform or provider is a big decision, and ensuring accurate and comprehensive supply chain visibility is vitally important to the overall success of any organization. No matter what solution you go with, here are three key factors to consider when it comes to maintaining line of sight to your shipping profile:

Account Access:

We see this more than you would think. When we load clients into FreightOptics, our own proprietary advanced logistics platform, we often identify multiple carrier account numbers that they had no previous visibility too. This oversight provides an incomplete picture of their supply chain, and can lead to wildly inaccurate data. For one client, we found 85 of these Dark Accounts, meaning they were making important business decisions using less than half of their actual shipping data.

Chargebacks:

Speaking of Dark Accounts, carrier chargebacks are another area where visibility is crucial. For shippers using third party accounts, they often don’t have direct access to the details surrounding those shipments. So, if there is an issue, there’s usually no way to dispute any chargebacks from the carrier. With the direct connections and detailed reporting of FreightOptics though, we’re able to identify these situations and help our clients when they arise. Unfortunately, not every logistics provider can say the same.

Network Mapping:

Finally, one of the most key contributions supply chain visibility can provide to any business is detailed network mapping. Quickly and easily visualizing demand areas and seasonality can help you respond in real-time to market fluctuations and supply chain bottlenecks with effective business decisions. Optimizing your distribution centers in the first place can even let you get in front of them, and help you provide your customers with a secure flow of goods while stabilizing your bottom line.

In the logistics industry, the arrival of new players often means new technology and innovations, and that’s always a breath of fresh air. But for any shippers out there looking to outsource their logistics needs, we have some words of advice: Caveat Emptor.

If you would like to learn more about gaining visibility to your supply chain, please reach out to us today, and let us show you what you’ve been missing.

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