20 Apr Advantages of 3PL
When a company grows and expands into new markets, it must decide whether to outsource its shipping and fulfilment operations or keep them in-house. Many of these companies rely on a third-party logistics suppliers to help them keep up with client demand.
However, not all providers are created equal. Find out everything you need to know about working with 3rd party logistics providers and the essential business processes they serve below.
What is it?
Companies that specialise in 3PL handle the entire shipping process from the point of origin (the manufacturer or distributor) to the final destination (the customer). To outsource shipment and fulfilment for a firm, 3PLs are often employed in outsourced logistics and supply chain management.
There are 3PL firms that specialise in customs brokerage, domestic and international transportation, and trade compliance, while others specialise in omnichannel logistics for manufacturers, retailers, and e-commerce firms.
Their Four Key Roles
Receiving Goods and Shipping Goods
Receiving and sending third-party logistics companies specialise in overseeing the entire shipping process, from packing to delivery. Technology, such as a transportation management system or integrated freight management services, is frequently offered by these businesses. In order to improve productivity and automate time-consuming operations like freight payment and accounting, these technologies were developed. To ensure complete visibility and accountability, these third-party logistics (providers also handle carrier interactions and freight data, as well as providing matrix reports in real time.
Transport providers are in charge of the actual transportation of goods or services between different sites. An example of this is when a company acts as a middleman between a company and a buyer, managing the shipment of inventory. In many cases, transportation providers use other transportation companies to perform their partner’s work for them.
Customizable storage, distribution, and transportation solutions are offered by many warehouse 3PL service providers.
As well as outbound order fulfilment, pick-and-pack, custom labelling, and manufacturing, many 3PL firms also provide a wide range of distribution and wholesale services. Large product quantities are difficult for a small business to distribute efficiently; by outsourcing distribution to an outside logistics provider, the company’s personnel may concentrate on their core competencies.
Advantages of using a provider
Companies use third-party logistics for a variety of reasons, as discussed above. Using a third-party logistics supplier can save time and money, as well as create a better and more inexpensive experience for clients. It’s not uncommon for firms to deal with a 3PL because of these reasons.
The ability to grow
According on what services are needed, a supplier can adjust a company’s space, labour, and transportation resources accordingly. 3PLs specialise in streamlining the logistics process, which you may lack the knowledge and experience to do well on your own.
Time and Money Saving
Success in company depends on being as efficient as possible, and a third-party logistics provider may make a big difference here. With a third-party you no longer have to spend money and resources on building and maintaining a warehouse and working out the best way to transport goods and/or services, as well as optimising those services and staying up to date with new technologies, as an in-house management model would need.
It’s now easier than ever to extend a business into new markets and regions, such as emerging countries, thanks to 3PL services. Working with a third-party logistics provider enables a company to take advantage of new supply chains, improve customer service, and enter new markets that it previously couldn’t. Third-party logistics providers, who typically incorporate the appropriate security and compliance procedures into their service offerings and have gained the necessary accreditation to offer worldwide services, make such growth more accessible than ever.