With more competition arising among the market, it has become extremely challenging for small and midsized businesses to efficiently manage their supply chains.
Transportation is a large part of many businesses and occupies a significant piece of their supply chains. Managing such an impactful branch as transportation is complicated, and trusting business to handle your supply chain can be very stressful. To resolve logistics challenges, you can outsource your transportation management.
However, trying to keep all processes organized becomes almost impossible. Especially, when you operate a large company with a complex supply chain. Many businesses think they will save money by running an in-house logistics department, but in most cases, it can be much more stressful than outsourcing. Creating and maintenance of the entire department, investing in a transportation management system is certainly a huge expense and can be a huge burden.
While you may doubt whether outsourcing will benefit you, assigning non-core transportation management is a common practice for both large and small businesses.
Why outsource your transportation management?
- Reduce costs, save time. Firstly, a 3PL simplifies the processes and makes your supply chain consistent, solid and unified. A good third-party logistics provider obtains a wide network of qualified carriers who they work with for years. This ensures you will get lower rates and faster transit times. The company also thinks about ways to optimize your shipments in the most cost-efficient way.
- Streamlined transportation processes. Integrated systems and technology lets 3PL’s provide complete visibility into loads and freight management. You will get regular reporting and analysis to keep track of your transportation management.
- No need to buy technology. A reputable 3PL is armed with tech tools such as a robust transportation management system (TMS), tracking tools, etc. While managing all of the transportation processes on your own, you would spend a big part of your budget on a TMS. Using a 3PL you can have management and reporting all in one system with all the needed features.
Ultimately, working with a 3PL can be beneficial both for your budget and operational efficiency. When you outsource your transportation management, it lets you access an enormous network of freight carriers, technology and reports, and all while focusing on your core business.
Discover new innovations that will dramatically change and impact supply chain and logistics in the nearest future!
So what is a 3rd party logistics company?
If you are new to logistics, you might ask this question multiple times a day. Or if you are a shipper, this might guide you in selecting the right Third Party Logistics Services company.
Ultimately, third-party logistics services encompass anything that involves management of the resources shipping to the destination areas. Additionally, in business 3PL has a broad meaning that can be applied to any service contract that involves storing or shipping things.
So What Is a Third Party Logistics Providers and What Do They Do?
A 3PL service may be a single service such as transportation or warehouse storage or it can be a system-wide bundle of services capable of managing multiple areas of your supply chain. To put it simply, 3rd party logistics is a company that works with shippers to manage their logistics operations.
This could include:
- Transportation or freight management
- Freight bill auditing
- Freight rate negotiation
- Distribution management
- And much more
Of course, some 3PLS will specialize in certain industries – frozen food as an example. While others might specialize in one of the specific areas of logistics mentioned above. With so many 3PL options, narrow your search and be strategic to find a partner that provides reliable, affordable service and is truly vested in your company. Also, when companies choose to work with a 3PL provider, they fully reap these benefits as the 3PL truly becomes an extension of their team.