Current Logistics Outsourcing Challenges

Today’s logistics outsourcing brings new problems. Rethinking strategies and managing extended timelines might be required.

Urszula Kelly walks you through the latest challenges—she’s putting everything into perspective.

For a complete view of how these trends affect businesses, don’t miss the video below.

Rob: This week, we’re tackling the topic of logistics outsourcing, which has become a significant challenge for many organizations. This complex issue affects how businesses manage their supply chains and operations. To provide insights, we have Ursula Kelly, an expert in the field of logistics outsourcing. Welcome back, Ursula!

Urszula: Thank you, Rob. It’s great to be here and discuss these pressing issues with you.

Challenges in Logistics Outsourcing

Rob: You’ve been deeply involved in logistics outsourcing for the past 2-3 years. Can you share how this field has evolved? Is it getting more difficult, and what are the main challenges businesses are facing now?

Urszula: Absolutely, Rob. Over the past few years, logistics outsourcing has indeed become more challenging. The first major issue is the significant shortage of people. The industry is struggling with a lack of drivers, warehouse staff, and administrative workers. This shortage creates considerable obstacles in maintaining smooth operations. Without enough personnel, managing and optimizing logistics processes becomes increasingly difficult, leading to delays and inefficiencies.

Equipment Shortages

Rob: And what about equipment? How is the shortage of equipment affecting logistics outsourcing?

Urszula: The second problem is the shortage of equipment. In previous years, it was relatively easy to acquire trucks and other necessary equipment. However, the situation has changed drastically. Currently, the wait times for new equipment have extended to between 18 and 24 months. This significant delay impacts our ability to meet the high demand for transport services and other logistics needs. As a result, companies face difficulties in fulfilling orders and maintaining their service levels.

Impact of Consumer Behavior

Rob: How is consumer behavior influencing these challenges?

Urszula: Consumer behavior is playing a crucial role in exacerbating the situation. Despite predictions of an economic slowdown, consumer spending has unexpectedly risen. This increased spending has resulted in higher demand for goods and services. Consequently, logistics providers, already dealing with staff and equipment shortages, are under even greater pressure. The mismatch between high consumer demand and limited logistics capacity further strains the industry.

Consequences for Businesses

Rob: What are the consequences for businesses grappling with these challenges?

Urszula: Businesses are often forced to make adjustments and compromises. With the ideal logistics providers either unavailable or unable to meet all requirements, companies need to adapt their expectations. They might have to work with less-than-ideal partners and adjust their logistics strategies to fit the current constraints. This can lead to less optimal solutions but is sometimes necessary to keep operations running.

Top Tips for Outsourcing

Rob: If someone is considering logistics outsourcing, what are your top three tips?

Urszula: First, businesses should set realistic expectations about what can be outsourced. Evaluate your operations and identify what can be realistically adjusted or eliminated. Second, allow extra time when searching for logistics providers. Given the high demand and limited supply, patience is essential to finding a suitable partner. Third, ensure that the person managing the outsourcing process is well-informed about current market conditions. They should be capable of navigating challenges and making necessary compromises effectively.

Check out the video above for detailed discussion of this topic.

Related articles on this topic have appeared throughout our website, check them out:

Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated September 6, 2023, under the title “Current Logistics Outsourcing Challenges“.