Transportation Outsourcing...Should you outsource to one or multiple service providers?

They advised me to have more than one transportation service provider in order to avoid the risk" and she asked..what is my opinion

One, Two or More??

Before you decide to have one or more service provider, you will need first to assess your situation, identify your needs and understand the market realities.

These are not all but important items to understand about your business:

Size of your business relative to suppliers capacity: evaluate your supplier's capacity to handle your regular business including your 2-3 years growth plans.

Seasonality of the business :

Do you need more trucks in season such as the summer or Ramadan? can your current service provider accommodate these needs?

Operation's sophistication:

Do I have the right transportation operations systems and processes in place? the more developed your operations the less risk you have in outsourcing with one or more service provider.

Need for innovation:

If you business need access to the expertise, creativity and innovation of the service provider management team then you will need to build long term, strategic relationship with your service provider.

Information technology infrastructure:

Do you use specific software or require some integration with your transportation service provider. If your operations requires high level of information exchange and data integration, then having one strategic service provider is better for your business.

Availability of other suppliers who meet your needs:

The more qualified service providers who exist in the market the less risk you have in outsourcing to one service provider.

The idea to outsource your business to one or more service provider has to do more than avoiding risk to being part of a successful execution strategy helping you achieve you business goals.

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