Internal vs. External Transport Managers: Making the Right Choice for Your Business
1st November 2023
Transport management is a crucial aspect of any business that relies on the transportation of goods or people. Businesses have two primary options for managing their transportation needs: employing an internal transport manager or outsourcing to an external one. The best choice for your business will depend on a number of factors, including the size of your fleet, the types of vehicles you operate, and your budget.
The Advantages and Disadvantages of External Transport Managers
Benefits of External Transport Managers
Cost-efficiency for small businesses: External transport managers can offer a cost-effective solution for businesses with a modest fleet size. This is because businesses only need to pay for the services they need, and they do not have to incur the costs associated with hiring and managing a full-time employee.
Specialised expertise: External transport managers often have specialised knowledge and experience in a variety of areas, such as compliance, regulations, and logistics. This can be a valuable asset for businesses that do not have the in-house expertise to manage their transportation needs effectively.
Objective compliance oversight: External transport managers can provide an objective assessment of businesses' compliance with relevant regulations. This can help businesses to identify and mitigate any potential risks. Their judgement is not clouded by the operational challenges or business difficulties; they are solely focused on ensuring a compliant operation.
Drawbacks of External Transport Managers
Limited scope: External transport managers typically focus on a specific aspect of transport management, such as compliance or logistics. This means that they may not be able to provide comprehensive support for all of a business's transportation needs, such as routing or internal HR management.
Reduced involvement: External transport managers are not directly involved in the day-to-day operations of a business's fleet. This can make it more difficult for them to troubleshoot problems and resolve issues quickly and effectively.
The Advantages and Disadvantages of Internal Transport Managers
Benefits of Internal Transport Managers
Cost-efficiency for larger fleets: As the size of a business's fleet grows, the cost of employing an internal transport manager becomes more competitive with the cost of outsourcing to an external one.
Comprehensive involvement: Internal transport managers can play a more comprehensive role in managing a business's transportation needs. This includes hands-on participation in troubleshooting and problem-solving, as well as developing and implementing transportation strategies.
Multi-tasking capabilities: Internal transport managers can juggle various tasks within the organisation, such as managing driver schedules, maintaining vehicles, and negotiating with vendors. This can maximise their value to the business.
Drawbacks of Internal Transport Managers
Higher initial costs: Hiring an internal transport manager can be a significant initial investment, especially for small businesses.
Training and management overheads: Businesses need to provide training and management support to internal transport managers. This can add to the overall cost of hiring and retaining an internal manager.
Too close to the business: An internal transport manager can sometimes find it hard to make the right decision because they have a more holistic view of the business, which can compromise their position.
Choosing Between Internal and External Transport Managers
The best way to choose between an internal and external transport manager is to carefully consider your business's specific needs and requirements. Here are some factors to keep in mind:
Fleet size: If your business has a small fleet, outsourcing to an external transport manager may be the most cost-effective option. However, as your fleet grows, it may be more beneficial to hire an internal transport manager.
Transportation needs: Consider the specific transportation needs of your business. If you need a manager who can provide comprehensive support, including hands-on involvement in troubleshooting and problem-solving, then an internal manager may be the best option. However, if you only need a manager to handle specific tasks, such as compliance or logistics, then an external manager may be sufficient.
Budget: Consider your budget when making your decision. Hiring an internal transport manager can be a significant initial investment, but it may become more cost-effective in the long run if you have a large fleet or complex transportation needs.
The decision of whether to hire an internal or external transport manager is a complex one. There is no right or wrong answer, as the best choice for your business will depend on a number of factors, including your fleet size, transportation needs, and budget. When making your decision, be sure to carefully consider all of the options available to you. If you need an unbiased opinion based on your business, contact the FTC for more information.