Logistics – Internal vs external courier fleet

In 2018 businesses are constantly on the go, over the last few years the surge in eCommerce has led to numerous opportunities for expansion and growth for various industries. This in turn has led to a need for implementation of further logistics networks and the usage of delivery fleets.

eCommerce ultimately, is not entirely online as the distribution network needs to be managed in order to plan for demand as to not lead to a deficit.

Internal courier fleet

The implementation of an internal courier fleet can be beneficial for a business but also poses certain risks. Goods in transit can be a liability without insurance. Covering a fleet can minimize the potential financial implications in the event of damage and loss of items which is necessary in the busy world we live in. Delivering your items to clients safely and securely is vital and requires a level of security behind it. The advantages of insuring your delivery couriers far outweighs the ramifications of failing to do so, with potential reputation damage and increased cost of replacing customers items. An organisation’s image is pivotal to its future as a negative brand picture can prompt negative consequences for customer retention, if a customer does not have confidence in an company’s capacity to deliver an item then they clearly not buy with them later on. The act of having an internal fleet can help protect the relationship between the company and its customers and seek to prevent potential brand damage.

External courier fleet

The benefits of an external courier fleet can also work in a company’s favour due to the shift in responsibility from the organisation to the provider but insuring your products is still vital. External couriers can facilitate rapid expansion and help a business further develop however due to the external nature the degree of control over the distribution is distance from the company which can lead to negative consequences for the customers experience if standards drop.

Furthermore, the act of using an external fleet is that your business can focus on its core operations rather than having to divert in order to maintain and manage a distribution network. This can allow companies to streamline and work in partnership with courier companies and not deal with the significant expenditure of a internal courier.

The important decisions

When choosing your distribution method, you need to evaluate the numbers, if it is not cost effective there is no point to the endeavor. Factor in the cost of vehicles, training of staff, the cost of following compliance, and the continued maintenance of the fleet. If it makes sense and is cost effective, then it can be a great idea. You will also need to factor in the potential effects on staff, is setting up and maintaining the fleet stopping staff from adding their value to the core business due to stress of working the network. However, proper thought about the implications of someone else being in control of your businesses distribution needs to be considered because its potentially your reputation and customers who could have negative experiences.

Combine the two?

Internal and external seem like two opposing ends that can’t work together, however in reality the application of an internal distribution manager in charge of liasing with the external company can be a compromise which works to provide seamless communication between stakeholders.

Finally, working towards choosing your distribution network requires evaluation regularly in order to see what is the best idea for a company at a given time and ensuring that you are adaptable to changing trends and developments which can help your company be more profitable.