When you outsource your essential packaging services to a trusted third party, this process is often referred to as contract packaging or co-packing. Whether your business needs help scaling or you simply lack the proper equipment, experience, or facilities, there are many reasons you can benefit from working with a co-packer.
According to a recent article published by Food Logistics, consumer demand for functional beverages, which provide additional energy or nutritional value for individuals, is skyrocketing due to current health trends and as a market response to COVID-19.
Contract packaging, or co-packing, has become a vital manufacturing option for many companies that don’t have the resources to manage the process effectively by themselves. Logistics businesses — especially those in the food and beverage, health, and pharmaceutical industries — that capitalize on this service can produce large orders without having to scale their manufacturing practices or staff, giving them a lot of advantages over their competition.
As expectations for the logistics function continue to grow, new government regulations take effect, and innovative technology becomes more common in the industry, companies are finding it more challenging to handle processes on their own. Outsourcing warehousing and distribution to a third-party logistics provider (or 3PL) is an option that offers the resources necessary to meet the challenges while improving efficiency, keeping costs low, and managing demand.
Every company can use logistics to help scale its business and develop a unique competitive advantage. The effect logistics has on reaching these goals is something a Chief Financial Officer (CFO) is especially able to see and value, despite their minimal daily interaction with the function, because of their position within a company. Even though CFOs are more removed, they can still directly impact the cost efficiency in the logistics function.
A great example is how huge industry players like Amazon have been successful because of the investments they’ve made into their logistics infrastructure. These investments have allowed them to create a competitive advantage over other retailers which now places them in the position to compete against prior logistics partners they once heavily depended on. With input coming from the right financial perspective, logistics investments can be a huge enabler for other shippers in much the same way.
Our country is living in strange times, and it’s impacting how most industries operate. For some companies, the demand for their products and services have disappeared very quickly, such as travel-related businesses like airlines. In others, companies and employees are working harder than ever, such as in the healthcare space. And for certain manufacturers, it’s temporarily changing what they do, which will eventually impact shippers.
Topics: Industry News
In an ideal world, every one of a shipper’s loads would all be the same weight, have the same pickup times each day, and be between a very limited number of origin and destination pairs. Carriers love transporting this type of freight because it’s predictable. “Regular” lanes give carriers the ability to plan better, and as a result, earn consistent revenue and better manage their equipment and driver resources.
Ultimately this helps them manage their costs better, which can then lead to lower rates for their customers, too. Regular lanes also increase a carrier’s familiarity with the locations and products, which introduces more efficiency and better service to the entire logistics process.