Home' MHD Supply Chain Solutions : MHD Spt-Oct 2014 Contents 8
DIRECTOR and co-founder of Lexian
Solutions Will Arnott has welcomed the results
of the inaugural Transport and Warehouse
Management Outsourcing Sur vey, intended to
help organisations to determine their transport
and warehouse outsourcing procurement policy.
“Determining the business case for
outsourcing your transport, warehousing
or overall supply chain function can be
a complicated, stressful and confusing
experience,” Mr Arnott said. “Determining
what components of your logistics function to
outsource, which logistics provider best suits
your organisation, and how to go about the
process of procurement, are all areas where
many businesses need better data to make
Purpose of the survey
In April 2014, MHD magazine, in conjunction
with Transport and Logistics News and Lexian
Solutions, launched a survey that has identi-
fied the trends around the industry’s needs
for transport and warehouse management
services. ‘Is it better to r un these services
in-house or outsource to a specialist?’ is just one
of the many valuable insights that the survey
was designed to provide.
The information gleaned from the survey
will no doubt assist transport and warehouse
service vendors to develop new services.
The major thrusts of the survey were to
provide the following key business insights:
• Is it better for you to run transport or
warehouse services in-house or outsource
to a specialist for transport and warehouse
• What is important to you regarding your
transport and warehousing capability?
• What are the outsourced providers doing
well and what are they not delivering?
• 84% of companies outsource their transport,
to some degree.
• Transparency and capability are considered
more important than price in selecting a
• Most companies go to tender as their
preferred method of selecting a transport
provider with 75% of companies using more
than one transport provider.
• Having gone through the outsourcing effort,
over 60% of companies have seen no improve-
ment in asset utilisation and service levels.
Crucially, 20% have seen an increase in trans-
port costs, while conversely, 45% have experi-
enced a decrease in transportation costs.
• In contrast to transport, only 40% of
companies outsource their warehousing, to
• Again, similar to transport, the decision
to outsource warehousing is based more
around the relationship, agility and service
levels than price.
• Like transport, the satisfaction level with
the provider’s performance was largely
ambivalent (60%), with few seeing an
improvement in cost or asset utilisation
• Respondents also indicated that in the areas
of international freight, customs broking
and freight forwarding, the majority (90%)
either outsource these services or were
• In other, more specialised areas such
as supply chain advisory, inventory
management and IT services, there was less
appetite for outsourcing (less than 20%)
• Reasons for not outsourcing were mixed with
the inability to form a relationship, lack of
perceived cost savings, and logistics being
a core competency of the company as the
• The perceived major challenges facing the
industry over the next few years are finding
talented people, the rising cost of services,
and keeping current with technology.
Profiles of organisations
represented in survey
There was no pre-requisite for participating in
the survey. All industries were represented, as
with all sizes of organisations.
Organisation size/fleet size: there was a
balanced representation across the board with
35% having over 500 people and 48% having
over 50 vehicles.
Logistics spend: 82% spend less than 15%
of their revenue on logistics.
Number of warehouses: 63% of
respondents operated 2 or more warehouses.
Number of SKU: good representative
spread across the board with almost a quarter
with over 5,000 SKU.
Industry shows tr ust in local transpor t
and warehousing vendors
Of those who were surveyed, over 90% did
not rate being a global supplier as being
important when it comes to selecting a
transport provider. Similarly, over 90% hold the
same sentiments with selecting a warehouse
Industry disappointed with transpor t
Of those who have already outsourced their
transport function, a majority (56%) are
not seeing any benefits in the key areas of
transport costs, transport asset reduction, order
fulfilment and delivery service levels.
Majority of industry has
outsourced transpor t
Only 20% of respondents are still entirely
running their own fleet. Of those who have out-
sourced, less than half (44%) are seeing cost
improvements of between 10% and 20%. The
rest are, in the main, cost neutral or negative.
A detailed copy of the complete sur vey
may be obtained from Will Arnott of
Lexian Systems, tel. +61 2 6377 4614,
email will_ar firstname.lastname@example.org, or
STOW’S SAFETY YELLOW
THE BRIGHTER CHOICE
13 STOW (13 78 69)
OUTSOURCING SURVEY REVEALS ALL
What most influences your choice of Transport provider?
MHD SUPPLY CHAIN SOLUTIONS — SEPTEMBER / OCTOBER 2014
MHD Sep-Oct 2014 8-17.indd 8
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