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Benefits of Outsourced Yard Management

Posted by Kristen Melendez on Thu, Jan 02, 2014 @ 10:49 AM

Benefits of Outsourced Yard Management

Outsourced yard management from a service provider improves the efficiency of your distribution center. Basically, the driver is in charge of moving freight from one dock to the next, depending on the receiving and shipping crews’ schedules, deadlines, and availability. So, if you have freight that needs to be received as soon as possible, the service provider’s manager would be able to open docks to receive that product.

But most important: you won’t have to worry about the complexities of hiring that driver.

Here’s why this is valuable.

Insurance

Insuring a full-time yard manager is expensive due to the costs of insuring a semi-truck driver. These insurance rates are higher than most due to the costs of drivers with a CDL. By using a service provider specialized in running dedicated trailer spotting operations, you can eliminate this fixed cost. Of course the provider will roll their insurance costs into what you pay for the service, but a good transportation provider should be able to keep their premiums low through performance and economies of scale.

Licensing

If you hire your own yard manager, they will be required to receive and update various licenses—like CDLs. These can become expensive year-to-year. With an outsourced driver from a service provider, you won’t have to worry about paying for licensing.

Regulatory Compliance

Maintaining compliance is a fulltime job in itself, and violations are really costly. If you only employ a single or a few drivers, they’re still required to comply with the regulations that the service provider would. Of course, the service provider has the staff that would be maintaining compliance anyway.

 Maintenance and Equipment

Equipment ownership or leasing and repairs to that equipment are not only costly, but also time consuming. Coordinating maintenance and dealing with the effects of a service outage usually falls on the Director of Operations, who is already over-burdened. Hiring a third party to manage yard operations solves this problem in two ways:

  1. The third party provider should have a contingency plan for equipment failures, and
  2. The Director of Operations only has to make one quick call

Reduced Driver and Warehouse Wait-Time

The time product spends on a truck is time away from the store. That means product becomes more expensive. You pay in idle labor hours when warehouse associates are waiting for a new trailer to arrive for loading or unloading.  You pay in driver wait-time. You are paying for a driver to sit because he or she is unable to make their next delivery. However, with a yard manager, trucks can drop off their freight and be ready to make the next shipment in minutes, not hours. A yard manager creates flexibility to move trailers from one dock to the next, keeping product moving and truck drivers on the road.

Experience

Each warehouse is different and has certain quirks. Invest finances in a yard management service because you know they will build experience by working in your location, specifically. With outsourcing you can contract a service provider who will be able to learn the ins and outs of your hub. This is invaluable.

Trust

If you contract a good outsource company, you won’t have to worry about turnover rates. The company you hire for yard management should be one that has a consistent, low turnover rate. No matter your company’s turnover rate, you’ll know that the yard manager is dedicated to their position. Be able to trust your yard manager.

 

The Costs of E-Commerce White Paper        Benefits of Outsourcing E-commerce Fulfillment and Returns Case Study

Topics: Shipping, Yard Management, Distribution