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Own or rented transport. Which is better?
This is a question that sooner or later everyone who is engaged in or plans to engage in logistics will ask themselves. The wrong choice can lead to serious financial losses. In this article on the website of LLC «SyncraNova». we will tell you how to avoid unnecessary expenses and choose the best option for your business.
Own fleet of vehicles
Own transport means absolute control over your transport. You decide when, where and how to deliver your goods. There is no dependence on external contractors, and customers see you as a serious person.
Pros:
But! This pleasure is expensive. You will have to invest a tidy sum in cars, equipment, garages and repair shops. And if the business is seasonal, the cars may be idle and you may lose money.
Minuses:
In which case to choose:
Recommendation:
Before buying a vehicle, calculate everything down to the last detail: the costs of purchase, maintenance, depreciation and drivers' salaries. It is important to take seasonality into account: downtime can be more expensive than it seems.
Own fleet of vehicles
Own transport means absolute control over your transport. You decide when, where and how to deliver your goods. There is no dependence on external contractors, and customers see you as a serious person.
Pros:
- Total control. Routes, schedules and condition of vehicles - everything is in your hands.
- Quality of service. You set a standard that sets you apart from your competitors.
- Company prestige. Customers like stability.
But! This pleasure is expensive. You will have to invest a tidy sum in cars, equipment, garages and repair shops. And if the business is seasonal, the cars may be idle and you may lose money.
Minuses:
- Large investment. Procurement of transport is a serious strain on the budget.
- Maintenance costs. Maintenance, taxes, insurance, repairs and spare parts are not trifles either.
In which case to choose:
- If delivery is a priority for your business.
- If you have a stable volume of orders, not depending on the time of year.
Recommendation:
Before buying a vehicle, calculate everything down to the last detail: the costs of purchase, maintenance, depreciation and drivers' salaries. It is important to take seasonality into account: downtime can be more expensive than it seems.
Hired transport
The scheme initially looks simple: sign a contract with a contracting firm and don't worry. But not everything is so perfect.
Pros:
Cons:
The scheme initially looks simple: sign a contract with a contracting firm and don't worry. But not everything is so perfect.
Pros:
- Savings at the start. There is no need to spend money on buying cars and organising a fleet.
- Flexibility. Need to deliver a specific load? Contractors will always have the right equipment.
- Minimal hassle. Maintenance, repairs and taxes are not your concern.
Cons:
- Risks. An unreliable carrier may miss deadlines or ruin your shipment.
- Less control. You depend on the contractor's schedules and capabilities.
- High cost. Hired carriers can be more expensive than your own fleet.
In which case to choose:
Recommendation:
Choose contractors carefully. Look at reviews, check the terms of the contract and don't be afraid to ask questions. It is better to overpay for reliability than to suffer losses later.
Combined approach
The blended model combines the pros of both options. You have your own transport for basic tasks, and hired transport for peak loads or specific loads.
Pros:
When to choose:
If you have stable transport volumes and care about high quality of service - organise your own fleet of vehicles. If you are just starting out or have a seasonal business - rented transport will be the best solution.
Don't be afraid to experiment and combine approaches. The main thing is to always keep your costs under control.
- If your business is new and you don't want a big investment from the start.
- If your transport is irregular or highly seasonal.
- If the ability to use different modes of transport is important to you.
Recommendation:
Choose contractors carefully. Look at reviews, check the terms of the contract and don't be afraid to ask questions. It is better to overpay for reliability than to suffer losses later.
Combined approach
The blended model combines the pros of both options. You have your own transport for basic tasks, and hired transport for peak loads or specific loads.
Pros:
- Savings. Your own vehicles work on regular routes, and hired vehicles are connected only when necessary.
- Flexibility. You have a back-up plan in case of a sudden increase in volume.
- Control. Basic transport remains under your control.
When to choose:
- If transport volumes are unstable.
- If you need a variety of vehicles for different tasks.
If you have stable transport volumes and care about high quality of service - organise your own fleet of vehicles. If you are just starting out or have a seasonal business - rented transport will be the best solution.
Don't be afraid to experiment and combine approaches. The main thing is to always keep your costs under control.