Four Reasons to Outsource Your Warehousing Needs
Outsourcing your warehousing can ultimately save your company time and money. While some companies are apprehensive to outsource, it is often the most cost-effect option and can directly impact your bottom line.
Below are four reasons your business should consider outsourcing to a third-party warehousing provider.
1. Lack of Warehouse Space Available
Due to the emergence of e-commerce and online shopping, warehousing space has become scarce. If your company wishes to purchase attentional warehouse space, they could be hard to find or priced too high. Warehouses have been in high demand since the start of the COVID-19 pandemic. Within one year, warehouse vacancy fell from 5.3% to 4.5% (1). Therefore, even if you wanted to purchase a new warehouse, availability may be hard to come by. Most industries are opting to build a warehouse instead of leasing. Warehousing construction from private sectors has equated for most of commercial construction this year. In fact, 30 billion more was spent on construction than any other commercial sector (2). Although building a warehouse is an option, it will take time and force those looking for an immediate need to find short-term solutions.
2. Easily Adapt to Business Demands
To fulfill your current orders and customer expectations, you may find yourself in a situation where your business needs to make adjustments quickly. However, if this is not done in sufficient time, the inability to adapt to rising business demand can have inverse effects on the customer experience. To avoid it affecting the customer, your company needs the ability to scale short-term while accessing long-term solutions. In the short-term, leasing warehousing space from a third-party provider can help alleviate these strains as your business adjusts without making a long-term commitment. While you’re under contract for the short-term, your business can evaluate long-term solutions without the risk.
3. Partner with Experts
Third-party providers are experts in their industry. Most providers use or offer technological solutions that can add value to your business. Technology solutions such as Warehouse Management System (WMS), Transportation Management System (TMS), Radio Frequency Identification (RFID), and Electronic Data Interchange (EDI) have become industry standards that provide your business with essential cost savings. Some providers even offer value-add services, such as business intelligence tools, that help garner solutions and needed supply chain analysis. Outsourcing to a third-party warehousing provider can provide your business with a strategic advantage in inventory optimization, efficiency gains, and low-cost transportation services.
4. Save on Overhead Expenses
Even though the unemployment rate has declined, jobs are still struggling to retain and hire employees (3). Since the pandemic, the worker shortage has been rising and is not expected to be over anytime soon. In February 2022, 11.3 million job positions were vacant, the second-highest on record in the United States (4). Hiring and training new employees costs your company time and money that may not readily be available to meet business demand. Third-party providers will already have a trained, expert staff to take on your business demands, ultimately saving your company time and money.
Is Outsourcing the right option for you?
Third-party warehousing providers allow your business to partner with experts and save on overhead expenses and warehousing. Outsourcing your warehousing needs can ultimately impact your company’s bottom line and help your company find short-term solutions for your business demands.
At SRC Logistics, we’ve partnered with several businesses nationwide to provide warehousing solutions as well as distribution needs. For consultation and a free quote, visit our site or reach us by phone at 417-893-6392.
Sources:
1. Statista.com
2. Statista.com
3. U.S. Department of Labor
4. U.S. Department of Labor