By Arina Smith
Having the right company as your business ally is a powerful tool to grow and become more resourceful. This is highly useful for logistics management as having a company with good logistics outsources can turn out to be quite beneficial. Logistics outsourcing continues to grow, with 62% of companies reporting that they are growing their partnership with third-party logistics providers.
Red Stag explains the 3PL process and benefits at https://redstagfulfillment.com/3pl-definition-process-resources/. The following article explains some of the advantages of using third-party logistics in supply chain management.
Reducing Cost
According to a report, 91% of 3PL beneficiaries agree upon successful relationships, and 68% believe in the use of 3PLs in minimizing their overall logistics costs.
Reducing Systems Investments
Good 3PLs have advanced transportation and warehouse management systems that allow companies to avoid large investments in software programming, maintenance, and purchases. However, this technology does not come free of cost, but this cost is distributed among many customers.
Saving Maintenance and Fleet Investments
Third-party logistics providers offer many options like dedicated contract carriage, which gives you a private fleet without the cost of owning shipping vehicles, maintaining equipment, retaining or hiring staff, managing safety, liability, or compliance issues.
Shared Freight Costs
The freight is corroborated with other shipments going to the same locations, which lets the load get consolidated into full truckloads and saves 25% than LTL shipments.
Access to New Markets
Companies and manufacturers may not have the time to uplift and build their own distribution capability in new markets, so 3PLs can ramp space and scale up or down depending on the needs. Again, this helps logistics costs parallel the revenue stream.
Improve Visibility
3PLs are capable of integrating trackers into shipper IT systems and have integration into WMS and ERP systems, which help them notify immediately in case of any exceptions. It benefits by keeping the customers connect
Scaling Infrastructure
If a new business sets up a plan with a 3PL provider and the business has grown after some time. Then, they can spontaneously expand their network in a variable cost environment as 3PLs have national and global distribution networks.
Increasing speed
The internal resources of companies are limited. On the other hand, even on short notice, 3PLs can immediately marshal resources across operations due to their vast network and systems to meet short deadlines generated through demand by customers.
Scaling Labor
3PLs are very skilled in managing physical and virtual workforces and scaling labor as needed using temporary workers to address volume spikes economically without the addition of permanent cost burdens.
Reducing Liability
The carrier assumes liabilities in freight responsible for drivers and staff, including compensation of workers and physical damages due to any incidents.
In a nutshell, third-party logistics are able to manage your logistics smoothly and provide optimal results. They can assist your business in increasing profits, enhancing client satisfaction, and reducing loading times. So, you focus on the core matters in your business, saving time and money.
Read Also:
