What does it take to compete in the modern economy? Over half a million new businesses open their doors each year in America, according to the U.S. Department of Labor. The overwhelming majority of them (about 99 percent) are small businesses. That includes pizza shops, diners, hair salons, gas stations, and convenience stores. Most of these new firms aren’t interested in reinventing the wheel. They simply want to offer their customers quality products and services. What has changed, however, is Internet selling.
E-commerce is the fastest growing sector in the retail industry. Even In the wake of the Great Recession, online sellers are reporting healthy profits. Many of these firms are not, in fact, e-stores. They are regular brick and mortar businesses that are trying to compete in a changing marketplace. Selling goods online can help them lower their overhead and give them access to customers across the country. But before they can ship products to customers who live in faraway places, they must find a reliable shipping company.
Any company that ships perishable items must either hire a reputable shipping company or establish their own distribution system. Because renting warehouses, refrigerated trucks, and hiring maintenance workers and truckers is too expensive for most small business owners, they simply hire a third-party logistics provider.
People love to give the US Postal Service a hard time, but the fact is that they do an excellent job. They send letters and packages at competitive rates and they almost always deliver them on time. But there is one thing the US Postal Service cannot do. They cannot ship perishable items at a low cost. Temperature controlled transport is a service that the post office does not provide.
Small fruit orchards in Florida and dairy farmers in Wisconsin must arrange for temperature controlled transport. The service gives them the ability to reduce transportation costs by consolidating shipments. Refrigerated facilities and transport is extremely expensive, both in maintenance and distribution costs. Hiring a third-party provider is often the way to go.
Costs & Benefits
Many new business owners worry about outsourcing any part of the supply chain. They believe that if the work is not done in-house, customer service will inevitably suffer. This may have been true in the past. But with new computer programs and tracking software, a manager can track shipped goods even if the service is handled by a third-party logistics provider. Furthermore, hiring a firm that specializes in temperature controlled transport gives the business owner and his employees the ability to focus on core competencies.
The truth is that most of the new businesses that fail do so because the owner focuses on too many things. Shipping and distribution costs are often disproportionately high, which is why business owners become obsessed with them. In time, the product or service begins to suffer as cuts are made due to shipping fees. Hiring an outside company that offers temperature controlled transport can save money and improve product quality at the same time.
