Both in literature and in business practice, one can encounter many opinions regarding the reasons for the development of outsourcing, especially the benefits it can provide to an enterprise. In the field of logistics, this translates into the motives for using logistics outsourcing, which makes it even more complicated to reach a uniform position.
However, despite many views and divergent opinions, everyone is generally in agreement that the primary premise for implementing the outsourcing concept was and remains the possibility of reducing enterprise costs. To take advantage of this opportunity, an enterprise outsourcing certain activities must purchase a specific type of service, which – since the Phoenicians invented money – is associated with a price. Therefore, there is a need to recognize the price conditions of outsourcing in the TSL (Transport, Shipping, Logistics) services market.
Price is, in fact, the instrument for the meeting of the seller and the buyer of a logistics service. Despite such a significant role and the importance of this economic category, the issue of prices seems to have disappeared from the sight of logisticians. While practitioners must use prices out of necessity, they too – as will be shown later – have many problems with this in logistics. It is therefore worth taking a closer look at this issue.
The relationship of logistics outsourcing to price
The issue of prices considered in the context of logistics outsourcing is most often associated only with the prices of logistics services. In fact, however, the use of logistics outsourcing can extend to many other strategic decisions of an enterprise related to the price category. These include, above all:
– constructing the enterprise’s logistics system,
– organizing cooperation in the supply chain (network),
– shaping logistics customer service,
– choosing a logistics strategy,
– choosing an enterprise pricing strategy,
– purchasing logistics services.
In each of these cases, logistics outsourcing can play a very important role. However, it should be remembered that the scope of using logistics outsourcing is largely determined by the level of logistics service prices, which in turn determine the size of the enterprise’s logistics costs. These, in turn, have an impact on the price of the product sold by the enterprise. When it comes to product prices, this matter is conditioned by numerous factors and lies primarily within the purview of marketing. However, marketing, while operating with its own tools, must also rely on attractive logistics solutions, and these, in turn, are increasingly conditioned by the use of outsourcing. This applies in particular to distribution and logistics customer service. The impact of logistics, including the outsourcing concept, on company costs takes place throughout the entire system, starting from the sources of supply. This is a very complex issue and it is impossible to develop it further here. However, in a great simplification, the impact of logistics costs on the price of a product can be presented in the form of two blocks of factors (Fig. 1).
The first of these concerns the characteristics of the transported goods, and the second concerns logistics activities. The more expensive raw materials, semi-finished products, and finished goods are, and the less transport-storage susceptibility they have, the higher the costs they generate and the more they are predisposed to be covered by outsourcing. Firstly, due to greater difficulties in organizing the logistics process, and secondly, due to the possibility of reducing costs by commissioning logistics activities to a specialized company. For example, the need to transport an oversized load almost always constitutes a serious challenge and is generally outsourced. The second block concerns the logistics activities that must be performed. Their number and degree of complexity, also through costs, affect the price of the product, and in many cases, encourage the use of outsourcing. We can see, therefore, that logistics outsourcing is linked not only to the prices of logistics services but indirectly also to the prices of manufactured products, and these links take the form of a system of multiple dependencies. Thus, knowledge of pricing issues determines the making of proper logistics decisions, especially those relating to the scope and nature of outsourcing application.
The price of a logistics service as a determinant of the boundaries of logistics outsourcing
Logistics knowledge is developing very dynamically, and therefore it is difficult to set any boundaries for it. Many studies or logistics solutions from a dozen or even several years ago are perceived in the light of current knowledge as significantly outdated. Added to this are constantly new areas of logistics application, which may lead to the conclusion that not only every enterprise but also every organization requires some form of logistics support to a greater or lesser extent. If so, another conclusion follows that almost every form of logistics support can become the subject of logistics outsourcing, and thus the purchase of each of them will involve the use of a price.
Traditionally, outsourcing was associated with procurement. However, in a short time, it was extended to other areas of enterprise functioning, currently covering supply logistics, production logistics, and distribution logistics. Within this phase division, other traditional areas of logistics in an enterprise can be distinguished, and thus possibilities for using logistics outsourcing, such as: transport, warehousing, inventory control, handling activities, returns management, order fulfillment, etc.