Business owners often assume that they’ll save money by taking care of as much as possible in-house, but that’s not always the case. Relying on a third-party logistics (3PL) company for shipping, warehousing, and other crucial distribution tasks can actually save money in the long run. Read on to find out why, and learn about some of the other benefits of working with a 3PL.
Cost Savings
The most common reason for business owners to outsource to Managed Logistics Solutions is to save money. Logistics companies that maintain their own fleets of delivery vehicles offer the best value, but even smaller 3PLs can reduce costs by negotiating with trucking companies.
Scalability
Small business owners always want their businesses to grow and thrive, but few are equipped to scale up shipping operations when they do. Working with a 3PL eliminates this problem.
Managed logistics companies are able to offer a range of shipping services, and they have full warehouses to accommodate clients’ inventory. This makes it much easier to scale up those requirements.
More Time
Keeping track of things like packing, shipping, and transportation takes up a lot of time. Outsourcing them to a trustworthy 3PL means business owners and their employees can go back to focusing on their core competencies.
Operational Expertise
Experienced 3PLs have years of industry experience and operational expertise under their belts. Employees are always aware of shipping regulations, changes in the freight market, and industry-specific issues. Business owners who want to take full advantage of their managed logistics providers’ experience should find companies that provide niche services for only a few industries.
Access to Technology
It costs a lot of money to invest in new software solutions and upgrades to existing ones. Developing successful shipping strategies in today’s competitive market requires access to:
- Transportation management systems (TMS)
- Data analysis and reporting tools
- Route optimization tools
- Real-time order tracking
- Consolidation optimization tools
- Freight auditing solutions
- Payment processing systems
Few business owners can spend the money to keep all of those tools up to date, but it’s nothing to a logistics service.
Part of their job is to keep up with recent changes so they can continue to provide the most efficient service.
Risk Management
Risk management is important across all of a company’s departments, but it can be especially relevant to transportation. Logistics providers know how to handle issues on the road so breakdowns, accidents, inclement weather, driver health issues, and unplanned checkpoints are less likely to get in the way of on-time deliveries.
Arguably the most important form of risk management is dealing with freight claims. When shipments are lost, damaged, or stolen, serious problems are created. When business owners work with 3PLs, they won’t have as much responsibility for these issues on their plates.
Find the Right Logistics Partner
Not all third-party logistics solutions are right for every company. It takes some time to find a service provider familiar with the unique regulations and requirements of each industry.
Look for a company that offers niche services and has a history of working with similar clients for the best results.
