7 Reasons Shippers Should Work with a 3PL 

There are numerous benefits of outsourcing your supply chain and logistics management to a third-party logistics (3PL) provider. Many of these benefits are centered around a 3PL’s inherent ability to provide shippers with cost savings, greater levels of efficiency, and seamless communication throughout the logistics process. 

Let’s explore some of the reasons why third-party logistics providers are able to drive significant improvements in these areas. 

 

  1. 1. Learn to Leverage a 3PL Provider’s Carrier Network

Because 3PL providers specialize in transportation, warehousing, and logistics, many are equipped with vast distribution networks and connections which allow them to efficiently service their clients at an affordable rate. 

A shipper with a private fleet that needs to move one single item from point A to point B has no choice but to use one of its own vehicles. This can be terribly inefficient from a cost and labor standpoint, slowly shaving away at the bottom line, while keeping quality at the forefront of the decision. 

3PLs typically leverage relationships to generate volume discounts and consolidate freight through methods like cross-docking, to lower overall costs and improve delivery on-time percentage. 

In fact, in the US, 3PL providers account for about 25% of the less-than-truckload (LTL) market. 

 

  1. 2. How 3PLs Drive Cost Savings

The most obvious reason for the cost savings behind hiring a 3PL provider lies in the fact that shippers don’t have to create and manage their own fleets, warehouses or tracking technology, but the cost savings of working with a 3PL don’t stop there. 

Shared Warehouse Space 

Often times, third-party logistics providers operate warehouses that cater to multiple shippers. Outsourcing warehousing cuts supply chain costs considerably and also supports changes in the amount of goods needing storage. 

3PL providers solve this problem with flexible, shared warehouses, designed to fulfill the scaling needs of multiple clients. 

Advanced Technology 

Outsourcing logistics allows shippers to avoid the costs associated with purchasing and implementing advanced delivery and tracking technology. 

Transportation Management 

Third-party logistics providers have professional experience and insights that promote increased efficiency and cost savings throughout the warehousing and delivery process. By taking advantage of vast resource networks, consolidating LTL shipments and implementing processes like cross-docking, 3PLs are able to create savings for shippers. 

 

  1. 3. Flexibility & Scale

On average, 3PLs should be able to handle a capacity up to 30 times the order volume of a particular shipper. This makes 3PLs extremely flexible, as they can adapt to high and low order volumes without suffering from decreases in efficiency. 

 

  1. 4. Performance Monitoring & Consistent Improvement

3PLs typically have more technological resources to measure their delivery and warehouse performance, while possessing the industry experience to draw valuable insights from the reports the technology helps them generate. This feedback helps shippers grow and improve efficiency and customer satisfaction for the companies they assist. 

By using performance monitoring and analytics to build a knowledge base on factors like inventory levels, product popularity and shipping speeds, 3PL providers can ensure that their clients are getting the most out of their fulfillment strategy. 

 

  1. 5. 3PLs Help Shippers Decrease Risk

By hiring a 3PL, shippers are able to alleviate the risks that go hand in hand with fluctuations in order volume or a need for warehouse space. 

They also reduce employee and/or security-related risk factors. Outsourcing to a third-party logistics provider—instead of having to hire drivers and insure the vehicles of a dedicated fleet—produces obvious cost benefits while decreasing the shipper’s liability. 

 

  1. 6. Education & Compliance

As experts in the supply chain and logistics industry, 3PL providers are required to be knowledgeable about certain aspects of compliance and regulation that shippers may not be accustomed to (or may not have the time to deal with). 

Outsourcing to a 3PL provider makes it far more likely that facets of logistics such as international shipping, taxes, customs and documentation will be handled correctly, saving shippers the headache of learning compliancy in an area far outside their core competence. 

 

  1. 7. Better Customer Service & Time Efficiency

83% of 3PL users agree that the use of 3PLs has improved service to their customers. The benefits of working with a 3PL provider create a ripple effect that ultimately improves the experience of the end user. 

When a shipper chooses to outsource to a 3PL, there’s no longer a need to manage a facet of the business that lies outside of the company’s core competency. In addition, the vast industry networks, experience and flexibility of 3PLs drives efficiency, getting products to consumers quickly. 

If you’re interested in working with a 3PL to enhance and streamline your operations, fill out the contact form below to be put in touch with one of our in-house logistics experts! 

Written by:
Tim Griffin
Director of Marketing & Media, C.L. Services

Get in Touch with Our Logistics Experts!

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