Is owning a private fleet the best option?
Owning a private fleet to move your loads may seem like a dream come true since having company-owned trucks haul your goods gives you brand visibility and more control. However, there are both pros and cons to owning a private fleet of trucks, and it may be worth choosing to outsource some or all of your transportation needs. Learn the differences between these two options and see how to decide which option works best for your business.
Understanding private fleets
A private fleet may allow you to make all the decisions about your operations, but there are other factors to consider. When comparing pros and cons, it’s important to remember to do what makes sense for your business.
Exploring the pros of private fleet ownership
Cost control, maximizing asset utilization, and branded trucks are all pros of using a private fleet. Let’s dive in and see why.
Cost control
Because you are paying all the costs associated with the fleet, you will have control over how much you spend and budget for your operations. You will also be avoiding any fees or markups potentially associated with providers, which may also provide some cost savings over time.
Predictability
By owning a private fleet, employees who route and track your equipment internally will be able to give you fast and accurate answers about delivery and pick-up times and capacity.
Branding
Having your own fleet means that you can brand your equipment. This allows for more market visibility while transporting your loads.
The downside to owning a private fleet
Along with the benefits of owning a private fleet come some cons, including:
Your initial investment is high
Significant initial investment is needed to acquire and maintain your own fleet. Costs such as the purchase of equipment, maintenance, drivers, and insurance all play a factor in this high investment, and you will have to take these under consideration when working with your budget.
Fleet management is a full-time job
Managing your fleet and its drivers can be a full-time job in itself. New employees may need to be hired and onboarded, while tenure employees may feel under or over utilized. Instead of outsourcing these services to an outside provider, owning your own fleet comes with the risk of over or under working your employees and having to continually adjust head count.
Underutilization of equipment can pose a problem
During periods of low demand, your equipment’s value may not be fully realized. When your equipment is not being used or managed correctly, then times of soft demand will lead to increased costs and inefficiencies.
Some risk is involved
Because you assume risk when you buy and operate your private fleet, you may bear responsibility for things like accidents, liability issues, and compliance with transportation rules and regulations. Mismanagement in this area can lead to fines, abrupt changes in your driver’s routes, and legal implications. You may also run the risk of some negative brand association if company trucks and trailers are seen at accident sites.
Breaking down outsourcing
Many companies utilize outsourced transportation, partnering with providers to move their loads for them. There are pros and cons to consider before moving forward with this option. Take a look at each one and consider how it would affect your business.
Outsourcing your transportation can benefit your business
There are many pros associated with outsourcing your fleet. These include:
Cost savings
Besides savings in the initial investment of buying new equipment for a private fleet, you are also saving money by gaining access to your provider’s pricing and network. These experts will work with you to show you how much you will actually be saving by leveraging their own networks and resources in order to keep your costs down.
You gain the ability to scale
Scaling when you have a private fleet may be difficult and expensive. However, scaling with a 3PL partner can be quite a simple accomplishment. By outsourcing your fleet, you protect yourself from underperformance as well as overperformance and expansion of your business. For example, if your business is growing, outsourcing your fleet allows you to keep pace with your loads without having to buy new equipment. Further, if your business has a slow period, you won’t have to worry about the underutilization of equipment.
Expert advice is provided
Brokers have highly specialized knowledge of the logistics industry and can leverage their experience to optimize routes and improve efficiencies. If you are using your own fleet, you would have to extensively train staff to learn the ins and outs of the industry. Outsourcing your fleet helps you avoid these additional trainings.
Technology gains
Using a trusted provider allows you to gain all of the innovation and technology they use. Your company may not have access to these highly advanced systems, but using a broker helps you benefit from their tech investments.
Reduced risk
Because you don’t have to worry about things like accidents, compliance, and regulations, you will have more time on your hands and more money in your pocket if something were to go wrong. Also, there aren’t any additional risks or potentially negative organizational perceptions associated with branded equipment.
Cons of outsourcing your equipment
Here are some cons associated with outsourcing equipment:
Coordination can sometimes be more difficult
If you hire a provider to take care of your loads and do not have good communication with them, issues may arise. It’s important to work with a provider that you trust and have a great rapport with because when you partner with a provider, you are trusting them with your loads, which limits your control over them.
You are relying on someone else
Ultimately, by outsourcing your transportation needs, you are relying on that company to fix any issues. Choosing a trusted provider is paramount, and when you find the right provider you can leverage that relationship to sleep soundly when issues arise. It is, in fact, the broker’s job to keep your loads moving smoothly.
Passing on control
When outsourcing your transportation needs, you may give up a sense of control of the process; however, if you trust your provider to meet challenges, make appointments, etc., then giving up control may be easier than you first thought.
By eliminating check-in calls with drivers, calls to your vendors to see if loads were picked up and delivered on time, and the logistics of routing your trucks across your lanes, you can spend more of your time growing your business.
A hybrid approach provides stability
If you currently have a private fleet and need more capacity, a trusted provider is there to help. The need for additional capacity often comes while your business is scaling. Scaling a business can be difficult when it comes to dealing with your increased load count. Instead of buying new equipment to cover these lanes, a broker can help with supplemental capacity to fill in the gaps in coverage.
A hybrid approach is beneficial because it helps you balance control and cost efficiency. Brokers are a great resource when sourcing additional capacity and can help while scaling your business or in times of high demand.
Trust ArcBest with your outsourced freight
ArcBest is ready to handle your outsourced capacity, whether for supplemental reasons or your entire transportation plan. Whether you need LTL solutions, truckload brokerage, or expedite, ArcBest is here to help you find the mode that best suits your business.
To better understand what solutions ArcBest has to offer, reach out to our team today.
