By Brian Tu, Chief Revenue Officer of DCL Logistics While some companies ramp down over the holidays, at DCL, it’s…
Top 5 Benefits of Working with a 3PL
3PL (third-party logistics) companies provide cost effective, end-to-end supply chain logistics services to ecommerce businesses who need to get their products to consumers. Most 3PL providers offer warehousing, inventory management, freight forwarding, domestic transportation, customs clearance, and sometimes they have a catch-all category of specialized offerings called value-added services. Many ecommerce businesses work with a 3PL company in order to have an expert in the industry handle their logistics and fulfillment.
There are many common misconceptions associated with bringing on a third-party logistics company, including increased overall costs, more hectic work, business security breaches, and losing control of supply chain management and logistics operations. However, in most cases, if you outsource to a 3PL provider can create more organization, efficiencies, and also growth, which leads to profitability. The expertise and resources that a good 3PL provides will in fact, reduce overall costs and free up your in-house resources, to enable you and your team more time to focus on growth plans for your business.
Read on to learn five top benefits of outsourcing order fulfillment to a third-party logistics provider to enable growth for your company.
Providing All Services Under One Roof
When all your freight and logistics services are conducted under one roof, it will save time and money, and probably give you comfort to know that everything is taken care of. Plus when all logistics are connected, you as a business owner will have more control and better visibility, which means a smoother operation for your business. An established 3PL will have the labor, resources, infrastructure, and capital deployment to bring all the required services under one roof. Whether you need warehousing, value-added services, customs clearance, international freight forwarding, domestic transportation, or even IT-support, you can rely on a professional third-party logistics provider to take care of your business. Outsourcing can save you time, energy, and money.
Strong Relationships and International Network
If you are shipping internationally, strong relationships with a global network is key to an efficiently coordinated delivery strategy and the ability to enter new markets. Companies can find it challenging to manage an international supply chain along with their core functions such as sales, marketing, and product development. International shipping can be especially tricky because of customs, special labeling, and regulatory requirements. A third-party logistics provider with international experience will have many strong relationships to coordinate your shipments, as well as industry knowledge of the always-changing demands of international trade regulations. A good 3PL provider will take care of your freight forwarding and logistics requirements with more dexterity, giving you not just a great service but peace of mind as well.
Professional Services and Knowledge
Managing a supply chain is a vast undertaking and requires expertise at each step of the way to deliver optimal results. Third-party logistics providers have professional teams responsible to help streamline each aspect of the supply chain, and they bring their industry knowledge to manage seamless processes and deliver desired results. Technology can play a large role in 3PL services and expertise. A provider that uses the latest in technology tools will serve you better—you will be able to monitoring of your inventory, receive timely reports and end-to-end visibility, plus it will likely help improve your customer satisfaction by ensuring they receive products faster and with less errors. By outsourcing logistics support, it eliminates the challenge of building in-house resources for each segment of the supply chain, and ultimately it leaves the details up to the professionals.
Improved Profit Margins
Logistics costs form a substantial part of the total cost of most products. It may seem counter intuitive, but outsourcing for warehouse management and transportation management can generate substantial cost savings if optimally managed. 3PL providers have many customers. This allows a 3PL to negotiate better prices for warehouse space, shippers and domestic transport providers. It also provides room within each warehouse for fluctuations and inventory changes due to seasonality. A well-established 3PL will have valuable historical intelligence and data on market conditions and be able to respond quickly without needing to grossly adjust your monthly costs.
Expert Response Team
Supply chain logistics can become quite complex and technical the more products and SKUs you have—adding returns to that and the number or potential errors or miscommunications is huge. Service providers like shipping companies often are partners in the supply chain but sometimes operate on their own processes and schedules. They have been known to demand very specific information requirements, or to send information to customers that may be confusing or sometimes misleading. Most 3PLs have great long-term relationships with service providers—they have worked out how to communicate best together on your behalf. Either your 3PL provider will manage the response on their own or even if your intervention is required, you would be asked for it in simpler terms. A good 3PL will help you through these steps and remove inefficiencies, which will stress off your shoulders and keeps the response swift for the shipments to arrive according to the pre-planned schedule.
The real value a 3PL provider can bring your business include: better rates, services, expertise, and a vast network of industry partnerships all along the supply chain. Many businesses come to this understanding quickly and understand the benefits of outsourcing. Choosing the best 3PL, one that is well suited to your needs will take a bit of effort upfront but will bring long-term benefits. A 3PL with core competencies that is the right fit will mean a long-term partner interested in generating growth for your business.
If you are looking for help managing your logistics and supply chain we would love to hear from you. Send us a note to connect about how DCL Logistics can help your company. You can read DCL’s list of services to learn more, or check out the many companies we work with