The holiday season is fast approaching and, for many retailers, that means a surge in demand for products. For the manufacturers and distributors that service them, this is the time of year they must have maximum flexibility in fleet sizing. Otherwise, there is an excellent chance that surges in demand will not be met, causing financial and reputation losses for retailers and suppliers. However, those with close relationships with nationwide logistics companies enjoy flexibility in fleet sizing for surges in seasonal demand.
Increases in Demand
While it may seem as though suppliers that maintain a private fleet of vehicles have the upper hand, this is not necessarily true. In most cases, companies can only afford to own, operate and maintain a very limited number of trucks and trailers. When demand goes up, it is essential that the size of the fleet respond accordingly. However, increasing the size of a fleet means purchasing more vehicles, which requires large amounts of capital. When logistics are outsourced, adding vehicles to the fleet is far less expensive, and can be done very quickly.
Decreases in Demand
When demand decreases after the holiday rush, the additional fleet vehicles become a burden. Although they are technically considered assets, fleet vehicles carry a certain amount of liability as well. They must be properly stored, maintained, plated, and insured, whether they are being used or not. This is a considerable expense for equipment that is not creating revenue, especially for a smaller company with limited resources. Conversely, when all, or a portion, of the fleet is outsourced, both the assets liabilities of the company are greatly reduced.
Many retailers increase their staff to accommodate the consumer demand during the holidays. Manufacturers and distributors must also boost the number of drivers to ensure they fulfill their obligation to the retailers. However, training new drivers and providing attractive compensation packages can prove to be difficult. With a fully staffed, outsourced logistics company, there is no need to invest in any recruitment, training or salaries. The logistics company covers these expenses, along with all regulatory compliance responsibilities.
This holiday season, as consumers enjoy the sales and festivities, manufacturers, distributors and retailers will be hard at work. Those that rely on logistics companies to fill in the gaps of their fleet will have an easier time keeping up with demand. What’s more, they’ll notice a dramatic increase in revenue without having to invest precious time and excessive amounts of money.