How Effective Is Third-Party Logistics In The Supply Chain?
Undecided over hiring in a third-party logistics firm? Here is all you need to know about the efficacy of order fulfillment companies.
Third-party logistics services have long been touted as a highly effective way to do business. There are several key advantages to using a third-party contractor to fulfill the logistics needs of your business. From creating logistics strategies to improving the overall experience of your customer, third-party logistics could be more effective than you might think.
Using a third-party logistics fulfillment provider centralizes your shipping, receiving, and inventory operations and can save you money. Here are some of the other things you should know about what it can do for you.
What is Third-Party Logistics?
Also known as 3PL, third-party logistics is the process of outsourcing our product shipping needs to a third party. They are usually drafted in to help when a company starts to get bigger than it had intended. Growth is a wonderful thing, but if we do not have upwardly scalable logistics in order to keep up with that growth, it won’t be sustainable. That is where a 3PL company comes in and saves your reputation.
How Effective is Third-Party Logistics Throughout the Supply Chain?
3PL is widely regarded as an effective method of shipping goods. In bigger businesses, it has become standard practice and an essential part of life. Let us look at what the difference would be for your logistics processes, should you make the switch.
3PL companies will have all the technology to streamline shipping on site. You would have to fork out for this technology if you were shipping yourself. Even if you were to make the investment, staying on top of the tech is always going to come second to your real business’s needs.
Minimizing Waste through Packaging
3PL companies are committed to minimizing waste and shipping materials used, while simultaneously having a commitment to using greener packaging materials. It is likely that you are shipping using the same materials you have always used. This is a key area of improvement.
Recyclable materials will contribute towards a greener planet. Lack of foresight in how you package your goods could be costing you thousands in excess spending. If you want a streamlined wrapping process, you use a 3PL provider.
Saving Petrol and Time on the Road
Third-party logistics providers have intelligent software that plans the route from the moment it leaves your warehouse, right down to that last mile. Every step of the journey is planned out to save the driver time and company money. The delivery process is faster, more organized, and better suited to a customer-centric business model as a result.
Boosts Omni-Channel Delivery
Your customers want to be able to buy from your morning, noon, and in the dead of night. A shipping company is dedicated to responding to these orders placed, regardless of the time of day. They can therefore respond faster than you can to get that package on the road. Let us not forget that they will have multiple delivery channels, too.
3PL help tackle supply chain disruptions
Of all the reasons outlined above, the fact that third-party logistics providers can help protect your business against disruptions to the supply chain should be the number one point. After Covid-19, we all learned a hard lesson about what can happen when the supply chain is interrupted. A company that makes shipping its business has multiple backup plans in case the supply chain does get disrupted and your goods or deliveries fall through.
3PL is About Experience Over Activity
You can pack your own orders and it will save you money, but it will cost you in productivity and hours best spent elsewhere. Outsourcing is the better idea by far.