Business Processes Outsourcing Key for Carriers

Business Processes Outsourcing Key for Carriers

The current climate for freight carriers is precarious to say the least. Especially with freight conditions consistently getting worse. Not to mention the tariffs set on all sorts of goods and an extended U.S. China trade stand-off. In fact, this has a number of less-than-truckload carriers diligently monitoring their operational budget. These companies maintain they have to do this in order to stay competitive in this environment.

Plus, according to Tim Denoyer, vice president and senior analyst for ACT Research, freight amounts don’t look like they’ll increase in the near future.

“Freight remains soft, as expected, and while we see reasons for recovery in the second half of 2019, escalating trade tensions raise the risk of freight recession,” Denoyer said.

There is some small optimism for an improved climate based on the fact the U.S. and China are at least willing to talk soon. In fact,officials discussed the threat of more tariffs being levied at the G-20 Summit in Japan just last week. However, President Donald Trump and Chinese leader Xi Jinping did agree to being trade discussions once more.

While the return to talks was good news, there’s been no timetable established to complete these discussions. Still, the countries did agree to lessen the severity of the restrictions against the Chinese tech company Huawei. Also, they raised the U.S. farm product exports to China.

At the same time, President Trump raised the specter of imposing even more widespread tariffs. He did so by claiming the United States could target Vietnamese goods. Trump went so far as to say that many of these products have been quickly relabeled “Made in Vietnam” in order to escape the tariffs.

Back-End Office Outsourcing as Solution

Because of the troubling nature of this economic environment many trucking carriers are choosing to outsource their business processes. In delegating these back-office activities, companies are able to stay relevant in this atmosphere as customer demands become more complex and are always shifting.

Basically, it’s become critical that companies avoid back office mistakes. Especially, when it comes to labeling tariff codes for imported and exported goods. In short, if companies input the wrong code they can suffer huge losses. Consequently, to avoid this and preserve their profits, companies are choosing to outsource this work to more skilled practitioners.

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