Several factors can help promote the further growth and development of supply chain industries and some of them are logistics, transportation, and fleet management and maintenance. But for a few reasons, not all manufacturing companies from around the world may take the risk of owning a private fleet vehicle to supplement the company shipments and distribute raw materials or industrial products to their consumers. While several industries are operating an in-house fleet management, others are still depending on their third-party fleet outsourcing associates.
Because of the complexity that arises between operating a private fleet-management or taking advantage of the outsourcing ones as an alternative, we decided to put together the pros and cons of having your own delivery fleet to guide you in making an educated decision for your industry.
Pros
Flexibility
A company that runs its own fleet management is more likely to accomplish further tasks and fulfill consumer satisfaction at the same time. Considering they have full access and control to private delivery drivers and fleet vehicles, the distribution of products becomes easier and faster. This strategy would work best for industries with time constraints of delivery like bakeries, restaurants, and flower shops for they won’t have to rely on third-party services.
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Owning a private delivery fleet is like hitting two birds with one stone. Apart from the improved quality of product distribution, companies can also find a way to promote their brand without paying an advertising firm. By simply adhering the company’s name and logo with each fleet vehicle, the business can instantly gain more public exposure as they travel across the road.
Personal Touch
Several delivery businesses are switching to private transportation mainly because they want to keep a personal touch with their customers. It’s like making the consumers experience more personalized service directly from the manufacturer itself and not from a different party.
Another way of building a linkage between the company and its customers is through GPS equipment on each vehicle. The system doesn’t only allow the management to monitor their drivers’ delivery statuses but it also gives the option of providing customers with an estimated time of arrival and locate the delivery.
Cons
Cost
The major reason why some businesses are still relying on outsourcing fleets is because it costs a little pricey to purchase an entire fleet of delivery vehicles. Most of the time, manufacturers and dealers provide special offers on limited or one-time (bulk) purchase only. Some companies require their employed delivery drivers to have their own vehicle in place of an equivalent payment but it is rare that an employee will the company to attach a free advertising logo or a GPS system to their personal vehicles.
Another thing that adds up to the price is getting the vehicles insured. Considering that fleet vehicles are much prone to accidents, insurance becomes a necessity to cover the expenses when something unfortunate happens on the road.
Maintenance
In supply chain industries, a vehicle’s appearance is everything. Regardless if it’s brand new or what, vehicles are meant to break in general. Thus, companies have to budget another cost of expenses for repairs and mechanical maintenance.
Storage
Providing a space for fleet vehicles, particularly the large ones, is a common issue that most industries encounter when operating its own fleet system. Sometimes, the company’s vicinity is not enough for countless vehicles so owners would have to find another place for storage. Unfortunately, almost all pieces of land space are for lease, unless they are owned by the management. So, that’d be another cost to pay.