Disruptive Start-ups Give Cause for Re-evaluation in Logistics

Published : July 3, 2014

outsourcing-logistics-solutionsTo paraphrase an old saying, no business should be an island. It's very easy for a business to fall into the trap of thinking that all facets of their operation—sales, marketing, fulfillment, and logistics solutions— must all be run internally. After all, who best understands your business and customers than you?

However, with disruptive start-ups turning the market on its ear, smart businesses have learned to pull their heads out of their own conference rooms to look at their operations with fresh eyes. Successful ones aren't afraid to consider letting other businesses do the heavy lifting for them.

Think Outside the Box— Then Transform It.

Much like Amazon's initial bookselling, hotshot business newcomer Uber is currently maturing into something that lies well beyond their original private car and driver definitions.

A glance at their current logistics solutions found ample room for expansion into non-passenger related transportation— deliveries of goods both pre-packed and on demand are possibilities that are being actively researched and pursued. And in recognition of the fact that their strength and versatility lies in their mobile 'workforce' of drivers and their vehicle fleet, Uber opted to invest in improving their business outlook even further.

A unique financing plan was created for new cars sold to Uber drivers where the company would offer a low financing rate on new vehicles in exchange for a 4-year commitment to Uber. If the driver/owner of the car opted to leave the company before that time, a higher interest rate would go into effect. Despite the financial output, it's a very smart gamble without much risk in order to insure the service was able to offer customers a consistent experience—especially considering the fact that Uber puts their gross profits at roughly $100,000 a year per car.

And while this recruitment drive will ensure consistency for transportation customers, it will also help the company realize the over-arching goal to branch out into delivery of more than just passengers in Uber vehicles.

Delivery and pickup of short term rental items, as well as one way delivery of goods, means that Uber might, for example, supply a grill, and hot dogs to cook, for a few hours before picking it back up. Thrifty consumers are becoming increasingly curious about arrangements such as this BBQ rental scenario, sensing an opportunity to sidestep hefty ownership costs for items that are only occasionally used.

In this, Uber has stepped well outside its initial 'comfort zone' and found a very enthusiastic reception in the form of backers and evaluations. There's a distinct lesson to be culled from this wheels-to-wunderkind success story.

Find Your Own Uber Success Story

Some companies are hesitant to outsource, citing concerns about quality control and adherence to corporate culture. While some oversight is important to keep a company cohesive in the marketplace, you may not be doing your fulfillment any favors.

The increased demand for unique logistic solutions like Uber's has bumped the standards bar ever higher. And both young, hungry startups and older, experienced ones alike are eager to make the case to new companies in search of logistics assistance that they're the right team for the task.

Lean On Outside Expertise

When you're ready to partner up and take your logistics performance to the next level, be sure to start out with a clear picture of what you're looking to improve and the results you're expecting from your new outsourced partner.

If you don't already have one, don't be afraid to talk with your potential logistics partners about your current logistics setup versus where you'd like to be. Would you like to expand your territory? Increase efficiency of delivery? Incorporate better tracking to pass on to your customers? Your logistics solutions partner will be able to look at your existing processes with a critical eye and an arsenal of ideas for improving, streamlining and evolving them into a well-oiled machine.

Don't let an outdated logistics flow set your business back in time and wasted effort. Take a page out of Uber's "owner's manual" and learn how to get your business in the fast lane with outsourcing your logistics.

Looking for a better logistics solution?   Click here to contact Aero and learn how we can help.

Topics: Supply Chain Logistics

Get the Guide Now to Build a Sound Warehouse Operations Strategy

Subscribe to Email Updates