Why Use a Third Party Logistics (3PL)?

Monday, 19 August 2019 | Freight Shipping

When companies develop new markets to pursue new customers and expand profitably in emerging economies, they are often confronted with challenges in supply chain operations. Companies need to stay ahead of their supply chain challenges and demands in order to minimize risk, reduce overall costs and decrease operational complexity. Evolving customer expectations, dynamic market regulations, multiple channels of sales, rising demand for improved shipping speed and quality, and other factors creates challenges in establishing a reliable and effective supply chain management system. That is why many businesses rely on third-party logistics providers (3PLs) to handle their supply chain operations and thereby meeting stringent delivery deadlines and boosting customer satisfaction.

Third-party logistics is a broad term nowadays, as it encompasses a multitude of services such as  transportation, warehousing, inventory management, packaging, and freight forwarding. According to the Council of Supply Chain Management Professionals’ (CSCMP) glossary, the legal definition of a 3PL is, 

“A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”

Leveraging the expertise and services of 3PL companies to manage their logistics operations in a productive and cost-effective manner allows businesses to focus on their core competencies. Typically, 3PL services are integrated within a company’s warehouse management and transportation operations as it enables businesses to mitigate risks while handing market demands quickly. Additionally, there are many other benefits of using a 3PL provider, including:

1. Time and cost savings

When your company seeks the services of a freight broker or freight forwarding company, it saves time and money across multiple platforms. Building and maintaining an internal warehouse, transportation management and distribution system won’t be a practical choice for many businesses. Partnering with a 3PL company not only eliminates the unnecessary overheads, but also free your business to bring more value to core initiatives.

2. Scalability

Any company with significant shifts in seasonal output or any  business anticipating rapid market growth can make use of 3PL’s services. A reputed freight shipping company will have the ability to scale their space, labor and transportation according to your changing requirements. Moreover, 3PLs have thorough industry knowledge, vast resource network and stays up to date with the latest developments in technologies. This would allow companies to take full advantage of growth opportunities. 

3. Improved customer experience

Customers in today’s era not only want great products, but also want a great shopping experience with faster delivery and lower freight quotes. Having a 3PL provider as your partner would help in ensuring your customer needs are met in the fastest and most efficient methods. As a 3PL company employs the latest technology and tools to streamline supply chain operations, it eliminates inefficiencies and ensure quality service. Improved visibility, order accuracy, customization and responsive service by a 3PL provider can improve operations and delight your customers. 

Partnering with a reputable 3PL provider with an extensive network of resources and warehousing locations won't just help your business’s bottom-line, but also help take it to the next level.