Subcontracting transport

Subcontracting transport

What is subcontracting in the field of transport?

Subcontracting is a contractual agreement signed by two or more companies. The company that commissions subcontractors is known as the contracting party. The companies that sign a subcontracting agreement are known as subcontractors. The purpose of the partnership for the contracting party (in this case the transporters) is to entrust all or part of the work falling upon it to subcontracting companies. Subcontracting is a submission solution for obtaining certain public markets even without the required internal skills.

The advantage of logistics means you can remain focused on your core activity without investing any essential human or material resources. Especially as logistics are a business requiring expertise, that is becoming increasingly automated and robotized, to ensure permanent service. activities are some of the most subcontracted by companies in general.

There are several kinds of subcontracting in the field of transport and logistics:

  • Occasional subcontracting to compensate for activity surges;

  • Regular subcontracting entrusted to transporters in certain fields;

  • Subcontracting done by transport commissioners for permanent logistical flows;

  • Subcontracting to operators, who lease their truck and driver’s expertise;

  • Transport subcontracting solutions are often entrusted to a .

Most people who create transport companies are former employees who purchase their truck. With the right legal installations (offices, parking spaces, warehouses), they most often launch their activity thanks to subcontracting agreements.

Specificities of subcontracting in transport

  • When the transport of goods is subcontracted, the contracting party is not responsible for the human or material resources put to use.

  • The subcontractor organizes and operates the transport of goods on behalf of a third party.

  • They take care of all or part of the transport process, from the pick-up of goods at the supplier’s to end customer delivery.

  • One of the subcontracted functions may be to establish the documents.

  • Between pick-up and delivery, the (a specific job) is for instance responsible for handling operators in the warehouses, and for booking slots on the boats, trucks or trains set to deliver the goods.

  • This intermediary may also delegate certain stages of the service to other subcontractors.

  • Most often - and this is a strength of theirs - they sell a unique transport solution at a flat rate, that encompasses all transport solutions.

  • The transport operator is a transport commissioner, who signs an agreement with a subcontractor to whom they entrust all or part of their transport operations.

Examples and practical applications

Financial revenue granted to the subcontractor

  • Invoicing must take into consideration the distance covered during transport,

  • The weight and volume of transported products,

  • Their nature: solid or liquid, rolling, dangerous goods, foodstuffs, etc.

  • Any additional services: , distribution (including invoicing), etc. 

Expenses to be monitored

  • The largest expenses pertain to direct mileage,

  • Fuel, 

  • Staff costs (fuel and personal expenses represent over 50% of the cost price),

  • Costs related to the vehicles: ownership and maintenance costs,

  • Insurance costs.

Transport subcontracting in figures

  • Source - Ministry of Transport: 70% of tractors and 30% of trucks drive for third-party purposes.

  • 2,340 new companies created in 2018 in the field of transport.

Regulatory cornerstones

  • Subcontracting operated by a transport company means it loses its direct payment recourse.

  • New version of decree no. 2019-695 dated 1 July 2019, entered into force on 1 October.