Expedited Carrier Services: Outsourcing
in North America
With broad and expandable carrier networks, outsourced service providers seem well posi-
tioned to either make educated decisions as a provider of outsourced carrier selection services
or to serve as an educator of shippers, to inform them of available options and potentially pro-
vide competitive performance information.
—Scott Pezza, research associate, Supply Chain Management, Aberdeen Group
ost is the paramount pressure driving respon-
dent shippers to explore the usage of expedited
carrier services. This manifests itself in the
areas where respondents cited plans for increased outsourc-
ing. Shippers have noted concerns over not only affordability,
but also visibility, reliability and a lack of control over out- C
inclusion of three cost-related examples out of the top six sourced services. Neither of the areas cited for growth are core
cited pressures: overall ( 55 percent), transportation-specific to the transportation function, in that they do not have direct
( 38 percent), and labor-specific ( 5 percent) costs. There is, bearing on delivery metrics or transportation costs. This may
however, a balance that must be struck between lowering offer an explanation as to why shippers are more comfortable
costs and improving customer service, as evidenced by the with ceding control of these functions to an outside provider
prominence of customer demand in the hierarchy of pres- since they are post-execution activities.
sures. Indeed, as recent responses demonstrate, shippers are
looking to navigate an increasingly complex supply chain,
reduce delivery times and lower the overall cost of opera- Such an explanation would also hint that other functional
tions. In approaching these goals, respondents noted an areas offer potential future opportunities for outsourced
aversion toward outsourcing their carrier selection deci- service providers. If concerns over reliability and control can
sions, preferring to retain in-house control over this impor- be alleviated (through visibility and event management, col-tant process.
laboration, and communication), shippers may be more will-Perhaps not surprisingly, carrier performance management ing to look outside of their operations for a provider to
and freight audit and payment were the only two functional manage those services.