Third-party logistics, or 3PL, is a widespread service that is provided by a business to an organization where the logistics system is entirely, or partially, outsourced.
Outsourcing your 3PL services is advantageous because of continuous improvements implemented in your logistics and supply chain process. Professional 3PL solutions can help maximize profits, minimize wait times, and improve customer service for your company.
Here are the top 5 advantages of hiring a 3PL:
1. Expertise and Experience
Logistics can be complex and require unique skills and knowledge to follow through. 3PLs can provide internal expertise in areas like transportation compliance, documentation proficiency, and industry regulations. Experts have experience in dealing with the various tasks presented in the demands of daily operations. While you focus on business needs, you can trust that the hired experts will keep running the required processes of the supply chain.
2. Strong Carrier Base
Next, a 3PL provider can provide your company with a wide network of resources to fully optimize the logistical services. There is an advantage to utilizing a 3PL that has sustained exclusive relationships to leverage in return for efficiency and cost-effectiveness for clients. Entering international markets can also be a challenge, however, a 3PL can mitigate that risk and help that expansion.
A strong carrier base can put resources to work because of its capabilities to make necessary changes and curate improvements in the procedures. In unforeseen situations where issues can arise, a third party will be responsible for finding alternatives and solutions to move forward. It is also an advantage in knowing that your products are insured from any unfortunate loss or damage in the freight process.
3. Technology
Another advantage of a 3PL provider is the access to tools that can ensure productivity. You can rely on constantly updated software and impressive use of innovative technology, which is used to monitor the coordination and analyze the key activities that are or are not working.
4. Saving Time and Money
In addition, 3PLs save your company the time and money required to properly execute essential steps in the supply chain. These tasks can include billing, auditing, training, staffing, and organizing your supply chain functions.
By working with 3PL providers, your company can be provided with the best rates when compared to individual shippers. 3PL providers simultaneously work with multiple clients, which allows them to pool together their high volume of shipments and orders. By hiring a 3PL to run the logistics of your company, you can open doors for further investments in other critical domains.
5. Scalability
Finally, an important advantage to recall is that a 3PL can offer the flexibility and scalability to utilize supply and distribution resources based on current business needs. Therefore, your company can maintain its enterprises with no loss to unused resources when sales decline and can quickly reboot when demand rises. For example, seasonal businesses can benefit from smoother transitions between market highs and lows. As well as businesses that aim to enter new territories have the option to grow seamlessly when more storage space or supplies are needed.
