Top 4 Considerations When Choosing a Nearshoring Provider
Many players in the logistics space have begun to realize that they can save a significant amount of money by nearshoring administrative functions to Colombia. The city of Medellin, Colombia offers advanced technology infrastructure and an available skilled workforce at much lower costs than the United States.
Many different company types across the supply chain have already taken advantage of the benefits Colombia has to offer, including:
- Non-Vessel Owning Common Carriers (NVOCCs)
- Third-Party Logistics (3PL) Providers
- Freight Forwarders
- Carriers (All Modes)
When seeking a nearshoring services provider to facilitate your Colombian operation, consider the following four areas:
While the Colombian business culture and relevant legal avenues are similar to the United States, it’s important that you select a nearshoring provider who knows how to navigate the intricacies of business operation in the country. This way you won’t have to worry about violating any local laws or international agreements.
When you want to get operations up and running quickly, consider that an established provider will already have an active talent pipeline full of personnel ready to be hired and trained. They will be able to analyze your business model and ensure that your Colombian labor force is trained in accordance with your company culture and any other criteria you provide.
Ask any potential provider for a full list of services they are capable of handling for you. Even if you don’t want to outsource multiple services now, you may wish to expand later. Compile a list of administrative and back-office tasks that don’t necessarily need to be performed in the United States, then compare that list with the provider’s service portfolio.
Aside from service versatility, you’ll also want flexibility in your contract. Seek a provider that doesn’t require long annual or multi-year contracts in advance. Shorter contract terms not only ensure that you won’t get locked into a business relationship you aren’t happy with, they also demonstrate that the provider has a high level of confidence in their capabilities.
An established business infrastructure is a sign of an experienced nearshoring provider. When you’re ready to nearshore some of your services, you don’t want to spend time waiting for your provider to source office space, internet access, or other basic business infrastructure. Seek a provider that has existing space and equipment available.
Also make sure that your provider can scale their physical assets based on your changing business needs. If times are tough, you want a provider who can dial back the assets allocated to your company. Conversely, you want a provider that can keep pace should you experience rapid growth.
Doing business in Colombia is substantially cheaper than it is in the United States. Labor cost savings often amount to as much as 30-60%. Beyond labor, general operating expenses are much lower, such as rent, utilities, internet, and other services.
If you’re prepared to nearshore some of your back-office functions, it’s highly likely you are doing so to save money. Make sure that you choose a provider that will pass on the fairest percentage of the savings achieved by establishing an operation in Colombia.
Nearshoring to Colombia with Linkoast
Linkoast has been helping NVOCCs, 3PLs, freight forwarders, carriers, and shippers outsource back office and administrative functions to Colombia for more than 15 years. Some of the most common services outsourced by our customers include:
- Customer service
- Import/export support
- Air/ocean documentation
- Lead generation
We handle all recruiting, hiring, and other human resources functions so that you don’t have to. We also have established office space ready and waiting for new clients and offer short-term monthly contracts.
If you’re prepared to save substantially on labor and operating costs by nearshoring part of your logistics business to Colombia, please contact us via the form on the bottom of our homepage.