3PLs Generate a Range of Benefits for Businesses
Third-party logistics providers are part of most businesses’ supply chains. 3PL service allows you to outsource operational logistics from warehousing all the way through to delivery and ultimately enables you to focus on other parts of your business.
While some organizations have the human capital, industry depth and expertise, and IT infrastructure to manage their transportation in house, the majority do not. Today, more than 80 percent of Fortune 500 companies outsource some aspect of their logistics.
How Your Company Can use a Third-Party Logistics Provider
A 3PL can be engaged in various aspects of your company’s transportation and distribution needs, including transportation management software, warehouse management software, freight rate negotiation, scheduled delivery, in-depth reporting, forecasting, and more, depending on the need.
The 3PL provider will manage day-to-day issues such as compliance, insurance, and hiring, training and screening drivers. Meanwhile, with a 3PL's expertise, technology and relationships within the industry, your company can reap significant savings through route optimization and other efficiencies.
Considering a 3PL
Transportation is a top 5 business cost and, depending on the size of your operations, can require significant management time overseeing staffing, licensing, training, route management, vehicle maintenance and more.
When considering hiring a third-party logistics provider, companies should not only consider what area of their logistics to hand off to their transportation services provider, but also how to collaborate most effectively with their 3PL provider.
But before you begin contacting companies to outsource your logistics, it’s important to identify potential pitfalls to hiring a 3PL and consider steps for creating a successful 3PL partnership that provides you the flexibility your business requires.
What do you Need to Service Your Supply Chain?
Engaging a 3PL provider offers a streamlined and seamless logistics solution to meet each client’s transportation needs. With a 3PL partner, companies have one point of contact over deliveries focused directly on managing your supply chain. Here are just a few operational advantages your business can benefit from:
Advanced logistics management software
A reputable 3PL will provide your company a single platform for managing and tracking inventory, orders and delivies, and provide expertise in sophisticated logistics software dedicated to the management of transportation.
Diverse fleet of vehicles, trained drivers
3PLs have a range of vehicles and a network of employees and contractors to serve your account. They also are responsible for all licensing, training and fleet maintenance, freeing your employees to handle other aspects and help grow your business.
Extensive Network to Extend Market Reach
Maybe your customers today are within a 30 or 90-mile range of your business, but what about in the future? Most 3PLs have an extended reach through relationships with other transportation services companies to expand their service and market reach as your needs grow. These brokered relationships mean the 3PL provider is responsible for flexing and managing these relationships efficiently, so that as the client, you have one main point of contact to oversee your transportation and delivery needs no matter the distance.
Secure Warehouse Space
Most reputable third party logistics companies have secure, monitored warehouse space for short-term or long-term storage of your inventory. Your 3PL partner can be a resource whether your business is seeking a space to accommodate overflow inventory or an outsourced distribution center that manages inventory, fulfillment and distribution of your product.
We hope these tips assist you in managing your third-party logistics (3PL) provider.