Logistics Outsourcing

Expert guidance on whether and how to outsource your logistics functions

Logistics outsourcing is the process of transferring the ownership for carrying out a specific logistics activity to an external party. Common functions of outsourcing include warehousing, transport, parcel delivery and returns processing. The objective of outsourcing projects is to assess the financial and service benefits of handing functions to a Third-Party Logistics provider (3PL) and selecting the appropriate partner using a robust and methodical process.

Key considerations for outsourcing include the release of capital to invest in areas of the business that have a greater strategic focus and the ability to leverage the skills and synergies of specialists versus a loss of control around service, priorities, and cost.

By contrast, insourcing is the process of taking back ownership of activities that were previously outsourced to one or more 3PLs. The objective of insourcing projects is to build the operational capability and processes internally and plan for, and manage, the transition. This could include allocating space, procuring equipment, recruiting people, or transferring staff via a TUPE process.

The key deliverables of outsourcing projects include a report detailing the business case for outsourcing logistics functions, the preparation of tender documentation (RFI and/or RFQ), the management of the tendering process, selection of a 3PL partner, contracting support and implementation steering.

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Typical Project Approach

We develop a strong working understanding of your logistics operations by facilitating a kick-off workshop and interviewing key stakeholders to enhance our understanding and build a picture of the project requirements.

We analyse representative data sets to understand current operational flows. These are overlaid with growth projections to create a ‘planning base’. This information is to be used as part of the tender documentation in the RFI and RFQ stage.

A longlist of 3PLs is agreed with the client and an RFI is issued to outline 3PLs of the project requirements. After reviewing the RFI submissions, each vendor’s suitability is assessed against the client’s requirements and a shortlist of vendors is agreed to progress to the RFQ stage.

A full RFQ document and data pack is compiled, detailing the project requirements, and is issued to a shortlist of 3PLs. We support the vendors to produce informed proposals by supporting site visits and coordinating the Q&A process.

3PL bids are evaluated based on a range of financial and non-financial criteria that includes proposal documents, vendor presentations, reference site visits and other discussions. 3PL assumptions are assessed and commercials negotiated until a preferred partner is selected.

We support further commercial negotiations in the build up to the contractual signature with the preferred 3PL. Contractual terms are assessed to provide balance strengthening our clients position if issues arise in the future.

Case Studies

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