The Benefits of Skipping the Middleman (11/4/24)

Smooth logistics means minimizing supply chain steps, and fees, to optimize efficiency

It is easy to see the surface attraction of a logistics intermediary for businesses of different sizes. For startups and SMBs, intermediaries can provide valuable administrative experience that early-stage organizations have not had the time to acquire. For those models and larger businesses, middlemen can also be a way to offload tasks and reduce work stress.

Those are good points, but the pros of any relationship must always be weighed against the cons. On closer inspection, businesses might discover the role of the middleman is not only unnecessary to logistics operations but detrimental to the business as a whole. Reducing the number of steps in your supply chain has the potential to improve factors from profits to public relations.

In this blog, you will learn:

• The benefits of disintermediation for a business

• How the customer benefits without a middleman

• How RLG provides all the benefits, without the middleman

The benefits of disintermediation for a business

The most immediate advantage of removing the middleman is saving the money necessary to retain them. Logistics managers may argue that time is money, which is why they pass certain responsibilities along to intermediaries: it allows the primary staff to focus on other things. However, this expense can slowly erode the bottom line of even the largest operations.

Using a middleman to make decisions and negotiate terms on your behalf is ultimately an expensive, passive and disempowering position. Taking a more active role in your wider logistics framework does more than save money. It provides the primary business with increased knowledge and confidence, which translates into greater overall logistical control and bargaining power. 

Depth of experience may also become a costly factor depending on what the middleman is negotiating. For example, they may have plenty of practice negotiating business contracts, but can they also bring insider knowledge of logistics to the table?

Sector-specific experience is not a benefit that all intermediaries can provide. If they have no practical insight into how supply chains operate, middlemen can become a liability. A business that becomes its own middleman gains valuable supply-chain insight and an ear to the ground listening for customer moods and expectations.

How the customer benefits without a middleman

Businesses who don’t pay for intermediary services lower their immediate operating expenses and can pass that benefit along to their customers. Beyond lower overhead, no third party can boost your customer service and inspire customer confidence through a leaner, more transparent logistics model.

Skipping the middleman means greater communication speed between primary businesses and carriers. Should customers have a logistics question about freight conditions, delivery arrangements or similar subjects, the primary business will be able to quickly provide the answer without first having to ask an intermediary. The closer logistics operations get to being in-house, the smarter, faster and more accountable the business becomes – and those are three qualities customers love.

No middleman also means a closer relationship between businesses and carriers. Middlemen inevitably send the message, “Speak to them, not to me,” which creates a sense of removal between the two essential parties. Carriers and businesses with direct access to each other enjoy a deeper connection that can lead to more mutually beneficial arrangements.

Beyond the initial savings of removing intermediary fees, developing stronger business/carrier relations creates even further savings for the business and generates greater ongoing value for customers.

How RLG provides all the benefits, without the middleman

Resource Logistics Group are not middlemen, nor are we Third-Party Logistics providers. Our role is to help businesses negotiate directly with their carriers and enjoy greater leverage over operations and contracts while generating savings in time and money.

Our services keep our clients in complete control. We can act on your behalf when it comes to negotiating partnership agreements or creating new ones. We also share our many years of experience in the art of successful RFQ/RFP management. This is an essential skill for any logistics chain looking to forge reliable and productive relationships to help them survive the pandemic and accelerate coming out of it.

We also specialize in managing freight bills and claims, streamlining every element of your logistics through our Transport Management System and analyzing your logistics data month-to-month so you can make more actionable and cost-effective decisions. Get in touch with us to learn more about making your logistics leaner. We can help you do a lot more with less.

Resource Logistics Group provides transportation and logistics advice combined with professional services and state-of-the-art technology. From contract negotiations to easing back-office burdens, we are your ally in excellence. Connect with us on our contact page for a free benchmarking analysis.