What is Outsourcing?

Outsourcing is the transfer of business tasks or processes to an external service provider instead of handling them in-house. One company contracts another to carry out specific activities on its behalf, often to reduce cost, increase efficiency or focus on its core business.

Why companies outsource

• Lower and more predictable costs
• Access to specialist skills and technology
• More focus on core activities
• Flexibility to scale capacity up or down

Outsourcing in logistics

In logistics, outsourcing usually means handing transport, warehousing or the whole supply chain to an external partner such as a freight forwarder or a third-party logistics (3PL) provider. At the broadest level, a company can outsource its entire network to a fifth-party logistics (5PL) provider. This lets shippers move goods without owning trucks or running their own dispatch.