For many small and medium-sized businesses, logistics starts simple: orders are packed in the back office, stock is stored in rented space, and deliveries are handled by local couriers. But as growth kicks in, this DIY approach begins to strain. That’s when the question of in-house logistics vs 3PL becomes unavoidable. Should you keep control internally, or outsource to a partner who can scale with you?
What Is In-House Logistics?
In-house logistics means handling all storage, order fulfilment, and delivery internally. You own or lease warehouse space, employ staff to manage stock, and coordinate transport directly with carriers.
The appeal of this model is control. You decide how goods are stored, how orders are packed, and how service standards are maintained. For businesses with very specific needs or those just starting out, it can feel reassuring to keep everything under one roof.
However, control comes at a cost. Running warehouses, hiring and training staff, investing in technology, and securing carrier contracts require significant resources. As volumes grow, so do the fixed costs and operational risks.
3PL Outsourcing Explained
A third-party logistics provider (3PL), such as Denholm Good Logistics, manages logistics operations on your behalf. That typically includes warehousing, order fulfilment, inventory management, and freight forwarding. Instead of owning facilities or hiring teams yourself, you “plug in” to the infrastructure and expertise of a provider.
With a 3PL, logistics becomes a variable cost. You pay for the space and services you use, scaling up or down as your order volumes change. Many providers also offer advanced tracking systems, customs clearance, and multimodal transport solutions, capabilities that would be expensive to build in-house.
The trade-off is giving up some direct control. Nevertheless, for growing businesses, the agility, cost flexibility, and expertise of a 3PL often outweigh the drawbacks.
Weighing the Differences: Cost, Flexibility, Tech, and Risk
Deciding between in-house logistics and a 3PL isn’t just about who moves your goods. It’s about how each model impacts your costs, agility, and resilience. Take a look at their key differences below:
Cost: fixed vs variable
Running logistics in-house locks you into fixed costs. Warehouses, equipment, staff wages, and systems must be paid for whether you’re at peak season or a quiet lull. For SMEs, this can put pressure on cash flow and limit the ability to respond to downturns.
By contrast, 3PL outsourcing shifts costs to a variable model. You pay for the services and space you use, making it easier to manage budgets as demand fluctuates. While rates may seem higher per unit at first glance, the absence of large overheads usually makes 3PLs more cost-efficient as you scale.
Flexibility and scalability
When it comes to in-house logistics vs 3PL, another essential factor to consider is flexibility and scalability. In-house logistics is rigid by nature. If volumes spike, you scramble to hire temporary staff or rent extra space. If volumes dip, you’re left with underutilised assets and ongoing costs.
3PLs are built for flexibility. They operate multiple warehouses and transport networks, meaning they can quickly absorb seasonal surges or support expansion into new markets. For businesses with growth ambitions or unpredictable demand, this scalability is a major advantage.
Tech and infrastructure
Technology is central to modern logistics: warehouse management systems (WMS), order tracking, and integration with e-commerce or ERP platforms. Building and maintaining these systems in-house can be prohibitively expensive for SMEs.
3PLs already have this infrastructure in place. Many provide real-time inventory visibility, automated order updates, and integration with clients’ platforms. Not only does this improve efficiency, but it also enhances the customer experience with accurate delivery information.
Risk mitigation and supply chain resilience
Managing logistics in-house exposes your business to higher risks. Staff shortages, system failures, or regulatory changes can disrupt operations, leaving you to fix problems alone.
3PLs spread risk across a wider base. With established SOPs, contingency plans, and compliance expertise, they are better equipped to handle disruptions, whether that’s customs delays, peak season pressures, or sudden market changes. For growing businesses, outsourcing can be a way to build resilience without overextending resources.
When to Consider Switching
Not every SME needs to outsource logistics right away. Nevertheless, there are clear signs it may be time to make the move:
- Order volumes are straining your current setup – warehouses are overflowing, staff are overstretched, and errors are creeping in.
- Costs are rising disproportionately – fixed overheads are eating into margins, even when demand dips.
- You’re expanding geographically – opening new markets or selling internationally often requires infrastructure you don’t have in-house.
- Customer expectations are rising – delays, errors, or lack of tracking can damage customer satisfaction and retention.
- Compliance and customs are becoming complex – post-Brexit requirements have made cross-border logistics more challenging.
If any of these resonate with you, outsourcing to a 3PL provider, such as our team at Denholm Good Logistics, could be the lever you need to unlock growth while regaining focus on your core business.
How Denholm Good Logistics Support Businesses Making the Move
At Denholm Good Logistics, we specialise in helping SMEs transition smoothly from in-house operations to outsourced 3PL models. With roots dating back to 1833 and part of the fifth-generation family-owned Denholm Group, we combine heritage with modern capability to deliver reliable, scalable solutions.
Here’s how we support growing businesses:
- Warehousing and distribution – our bonded and non-bonded warehouses, located close to major UK ports, ensure fast turnaround times and efficient customs clearance.
- End-to-end transport solutions – with multimodal freight options (road, sea, and air), we move goods seamlessly from origin to destination, supported by a global network.
- Customs expertise – post-Brexit, compliance is a major hurdle. Our in-house customs team manages documentation, declarations, and regulatory requirements, keeping goods moving smoothly across borders.
- Technology and visibility – Connect, our advanced WMS and logistics tracking tool, integrates with your systems, giving you real-time visibility of inventory and orders.
- Scalability – whether you’re managing seasonal peaks or expanding internationally, our infrastructure flexes with you. Dedicated account managers, SOPs, and bespoke processes align directly with your business, ensuring service levels are never compromised.
- Financial stability – as part of the Denholm Group, which is active across shipping, logistics, seafoods, and industrial services, we offer long-term security and resilience that many smaller providers cannot match.
For businesses weighing in-house logistics vs 3PL and considering making the switch, we don’t just provide services. We offer partnership, guidance, and a roadmap for growth.
Speak to Our Logistics Experts
As businesses grow, logistics become more complex. Running it in-house offers control but also comes with rising fixed costs, limited scalability, and greater risk. Outsourcing to a 3PL provider transforms logistics into a flexible, scalable function supported by infrastructure and expertise that would be costly to replicate internally. The key is to partner with a provider that doesn’t just handle operations but supports your long-term goals.
At Denholm Good Logistics, we’ve helped countless businesses make the shift successfully. Speak to our logistics experts today to explore whether outsourcing is right for you or book a site visit to see our facilities in action.
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