3PL - Benefits of Third Party Logistics

3PL - Benefits of Third Party Logistics

The 3PL industry is booming these days for a number of reasons. New global markets, the rise of e-commerce, and technological advancements have all contributed to the increased use of 3PL providers across many sectors of the economy. Globalization shows no signs of slowing down which only portends more growth in the 3PL field.

What is 3PL?

What is 3PL?Simply put, third-party logistics incorporates an additional entity to assist with a company’s logistics and supply-chain management. The third party does not hold ownership of the inventory in question but is legally bound to fulfill the activities for which they have been contracted to perform. Using a 3PL outsources part of an enterprise’s distribution and fulfillment services.

What Benefits Can be Gained by Employing a 3PL Provider?

There are a number of reasons that using a 3PL provider makes sense for large and small businesses. Large companies can spend more time focusing on their core competencies while outsourcing to a 3PL. Small business can make use of 3PL providers to extend their reach and compete with larger rivals.

Here are some specific benefits of using a 3PL provider.

Time and cost savings - Outsourcing to a 3PL provider saves time by eliminating the paperwork and staff training that would otherwise need to be performed in-house. This allows your employees to concentrate their efforts on other aspects of the business. There are also significant cost savings in a 3PL relationship. Making use of the provider’s warehouses, transportation equipment, and dedicated staff can lead to substantial savings over attempting to supply those items internally.

Industry expertise in 3PLIndustry expertise - The knowledge gained from performing similar functions for other companies is passed on to all of the 3PL provider’s clients. They may be able to make valuable suggestions concerning scheduling, delivery and pick-up times, and packaging. Most providers have extensive relationships with the transportation industry that can further assist in optimizing supply-chain logistics.

Access to technology - Technology associated with streamlining and improving your supply-chain is a critically important aspect of modern businesses. A 3PL provider can make this technology available to many customers. They handle the implementation, maintenance, and upgrades of the technological systems in place. Systems commonly offered by providers include tools to consolidate and optimize routing, analysis and reporting tools, and transportation management systems.

Improved customer service - By ensuring that your orders are picked up and delivered on time, a provider can help increase customer satisfaction and avoid scheduling issues and vendor chargebacks. They can insist on quality drivers that form a good first point of contact with your customers.

Scalability - A 3PL partner will enable your business to manage variances in demand over the course of time without the need to make capital investments.

Network resources - A great benefit of working with most 3PL providers is their strong network of relationships in the shipping and transportation industry. This enables them to make the best choices to handle your specific situation rather than forcing a solution to fit your requirements.

As you can see, there are many reasons why using a 3PL provider makes sense. If your company has supply-chain or fulfillment issues, you should investigate the ways a 3PL partner can help your business grows. Let American Manufacturing Solutions serve in the role of 3PL provider for your business. We have you covered with resources from warehouse space to expedited shipping to simplify and improve the management of your supply chain.