Transportation - Decision to go out on outsourcing
Irrespective of the transportation management (who’s who?), cost of transportation is always paid by the Lead Organization to the carrier. Organization may follow, 1PL and 2PL logistics (Transportation ONLY-insource and outsource). It is said that - Inbound and Outbound load management including transportation is one half or two third of price of the product. So majorly improving SCM, ends up in shortening cost incurred for transportation. Controlling entire inbound freight management may not be effective for all retail organizations. This may vary from organizations inbound volume and value of the load carried each time they receive an inbound freight. Its like a bell curve. I think, for an organization managing in house transportation, cost of the freight is directly proportional to the volume of the freight up to a certain 'breakeven point'. Beyond this point, cost decreases if volume goes on increasing. Hence till this point its better to compensate this cost by negotiat...