Problems › Should We Hire or Outsource? › Logistics & Supply Chain
The test is not cost. It is whether the capability is close enough to what you sell that owning it changes your position. This page works through it for logistics and freight companies specifically — including an unedited excerpt from a real analysis of a freight company.
The test is not cost. It is whether the capability is close enough to what you sell that owning it changes your position. Logistics and freight companies carry a specific bind here — dedicated freight dilutes margin and is also the only thing that fixes driver turnover. Until that is priced, revenue per loaded mile will keep moving for reasons nobody can attribute, and the debate about fully loaded cost will stay a matter of opinion.
Hire-versus-outsource is usually argued on cost per hour, which is the least decisive input. An outsourced function is generally cheaper at low utilisation and more expensive at high utilisation, so the honest comparison depends on volume you have to forecast anyway.
The decisive question is proximity to what you actually sell. Capabilities that touch the customer's experience of the thing you charge for, or that accumulate knowledge you can compound, are worth owning even at a premium. Everything else is a purchasing decision.
The third factor is variance. Owning a function buys control over quality and timing; outsourcing buys flexibility. Which matters more depends on whether your customers notice variance.
These three together are the signature. One on its own usually points somewhere else.
✓ The debate is being conducted entirely on hourly rates
✓ Utilisation of the proposed hire is assumed rather than estimated
✓ The function touches the customer directly
The move that usually makes it worse. Outsourcing something that accumulates knowledge you would have compounded, which is cheaper every year and weaker every year.
It is for you if you run or finance a freight company and the debate is being conducted entirely on hourly rates. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.
It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.
Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.
Below is an excerpt from a real run of this analysis on a freight company. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.
The subject is Ridgeway Freight Systems, a sample company profile used for testing rather than a customer — $240M revenue, 900 drivers.
Excerpt from a real Percision run · Pricing Strategy · sample company profile
The move. Convert 3-year dedicated customers into hybrid LTL lanes that stack 52-month durability and deliver $22M incremental operating income.
The leak it closes. Plugs $2.9M annual empty-mile cost drag by converting 5.5 percentage points of empty miles into loaded hybrid revenue
The assumption it rests on. Dedicated customers accept hybrid LTL lanes at 70% probability — the engine put the probability at 0.7.
| Investment required | $1.4–1.8M total ($450K software + $350K training + $600–1M salesperson SPIFFs) |
| Expected return | 12.2–15.7× on $1.6M base investment ($22M upside / $1.6M cost) |
| Revenue, year 1 | $4.2M incremental operating income (10 hybrid lanes × $420K avg contribution) |
| Revenue, year 2 | $11.0M incremental (25 lanes) |
| Revenue, year 3 | $22.0M incremental (40 lanes) |
| Exit criteria | Terminate hybrid program if <40% dedicated customer conversion by Month 12 or if hybrid lanes show negative operating income contribution by Month 18 |
This is one move out of a full analysis. Read a complete report — every page, no email required.
This question routes to Organizational Alignment Model, one of 29 engagements the platform runs. For logistics and freight companies it works through revenue per loaded mile, driver turnover, deadhead percentage and operating ratio, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.
You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.
At the utilisation where fully loaded internal cost falls below the external rate for the same output. Calculate that break-even point explicitly — it is usually lower than people assume and the debate ends there.
Anything where the accumulated knowledge is part of what you sell. Losing that is not a cost line, it is a slow reduction in what you are able to charge for.
By variance rather than by average. Outsourced work is often comparable on average and wider in spread, which matters exactly as much as your customers notice it.
Materially, yes. Dedicated freight dilutes margin and is also the only thing that fixes driver turnover — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are revenue per loaded mile, driver turnover, deadhead percentage, and an answer built on industry-general benchmarks will usually point at the wrong one first.
Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on revenue per loaded mile and driver turnover. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.
Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.
Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.
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