Third Party Logistics (3PL)
Filed under: Industry Trends
Third party logistics has become increasingly popular in that it saves businesses money and increases efficiency whilst creating a competitive advantage. As companies are continuously looking for ways to improve their processes, many are now looking to 3PL for this purpose. This week’s blog will explore what exactly third party logistics is along with its advantages.
What is Third Party Logistics (3PL?)
Third party logistics involves outsourcing to a logistics company to manage your businesses supply chain. A third party logistics firm provides numerous logistics services for their customers to use including, transportation, warehousing, management and packaging.
5 Advantages of Third Party Logistics
1. Major savings and reduction in labour costs
Outsourcing can result in major savings, such as a reduction in labour costs and administration. Additionally, as a third party logistics company deals with a large number of freight carriers, they will have the ability to negotiate larger savings and develop transportation that is more efficient. Outsourcing your warehousing needs also reduces costs for machinery and inventory management.
2. Tailored services
Third party logistics have the ability to tailor their services to what is required of them and can offer a range of solutions for individual companies to reduce their overall costs and increase efficiency. They can ensure your company needs are met using the most effective, cost and time efficient systems.
3. Enhanced Shipment Control
Third party logistics can offer enhanced shipment control. The outsourced company can contract and work with overseas suppliers with their greater booking options and service types. Shipping and transportation costs become cheaper by combining greater volumes to be transported together.
4. Access to valuable information
As third party logistics are coordinating for a number of supply chain processes, they have greater access to software that can provide information on best transport at competitive pricing. This software can greatly assist in determining the best carrier and the most reasonable cost, with the power to access current rates and numerous qualified freight companies. Therefore, your company can benefit from resources unavailable through in-house sources.
5. Up to date technology
If an organisation feels they do not have the expertise, manpower or infrastructure for their warehouse, logistics or operating systems they can still have an effective supply chain including reverse logistics by outsourcing to a qualified third party logistics organisation (3PL). 3PL’s ultimately allow companies to keep up to date with ever-changing technology without the extra costs and time involved which can then be spent on the core business function.
A third party logistics organisation has the ability to be in places where you are not and allows you to focus your resources on core competencies.
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