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5 Risks of Taking on In-House Freight Services

Managing your own movers with in-house freight services can come with a lot of strengths and opportunities, but there are risk factors as well. These are a few we’d suggest you consider before taking the next step.

Turnover, Hiring, and Training

By choosing to exclusively use in-house freight movers, you’re signing up for many additional costs like management, PTO coverage, and more. Each time a team member leaves, it’s impossible to be certain when you’ll be able to fill the role, and it can take a lot of time from your management team. Then, once they’re hired, you’ll have to train them. Regular turnover leads to a big gap in knowledge among your team. There won’t always be someone with a lot of experience, and that can lead to mistakes that are costly too.

Reduced Flexibility

Flexibility is a cornerstone of the American Freight Service value system. When providing lumping, rework, and cross-docking services, having a little flexibility to offer your clients matters when plans change unexpectedly at the worst possible moment. Having flexibility can make the difference between a shipment arriving to the customer on time or a few days late.

Working with outsourced warehouse labor can allow you to scale your operations quickly for seasonality or in the case of an emergency. It can allow you to adjust schedules quickly too. Evaluating your supply chain for flexibility is the same as evaluating it for effectiveness. And the reality is that internal freight services simply cannot score as high as a hybrid model.

Longer Turnaround Times

In-house freight services can be less expensive than external services when managed carefully, but that often means foregoing high coverage for industry seasonality, PTO, illness, parental leave, and more. When these situations stack on top of each other, lumping teams can fall behind and end up with a long line of deliveries that aren’t being processed. Not only does this mean your freight isn’t moving at the speed you need, but a pressurized situation can easily lead to mistakes, dumped loads, cut corners, and injuries—all of which lengthen timelines even more. But a third-party freight management team arrives at the job as ordered. It’s not your worry who calls out sick, and you can add on new workers quickly if situations change and you need additional help.

Injury and Worker’s Comp

Lumping your own freight in-house can be pretty dangerous—especially if you’re working with an inexperienced team or have damaged equipment. Accidents happen on the job, and it’s likely you’ll eventually have an injured worker on your hands. At minimum, your business will have to handle the expense and hassle of worker’s comp and being short a team member. At worst, you could be looking at a major lawsuit that threatens your business. It can be a lot simpler and more practical to hire a lumping service with a longstanding history of safety and a minimum of three years of experience for workers.

Inability to Spread Risk Around

One of the great things about working with an outside collaborator like a freight service provider is that they have more clients to help bear the weight of changes in the logistics industry like the recent warehouse labor shortages. These kinds of businesses have larger contracts with carriers and packaging manufacturers than your business could alone, which often leads to discounted rates for you. Choosing to weather the storm alone can mean having more control, but it also means fewer options.

Why Not Consider a Blended Model?

If you’re still convinced that in-house freight services are the right choice for your business, you don’t have to go it alone entirely. Choosing to keep a base crew of a certain size and then utilizing outsourced warehouse labor to alleviate high-volume periods can be a great option to mitigate risks. Reach out to our team to learn more.

Tags: Lumping, Reworking, Supply Chain