It seems when you ask 5 people to define a 3PL, you can get 5 different answers. Not only is this confusing to those of us that call ourselves a 3PL, it’s confusing to our customers as well.
As the freight market continues to evolve and tighten, carriers can be more selective about the freight they accept. As a shipper, making your freight more favorable to carriers will ensure you have capacity when you need it most.
By following payment terms, being flexible with delivery schedules, providing visibility to your carriers, being up front with expectations, providing driver amenities, and keeping the lines of communication open will make you a shipper of choice to your carriers and therefore, your freight is more likely to selected by a carrier when capacity gets tight.
Selecting a third party logistics provider can be a cumbersome task. Whether you're looking to outsource the logistics functions you currently handle yourself or you're hosting another bid process to replace or validate the current provider, it is a large undertaking with many variables. The market for third party logistics partners is changing rapidly with the innovations in technology both in the warehousing and transportation arena. Developing a Request For Proposal (RFP) for a 3PL partnership should not consist of the same tactics as shopping for transactional items; your 3PL selection should be strategic as it is a complex and valuable purchase that will ideally turn into a long-term professional partnership.
Outsourcing logistics functions can revolutionize your business and help you expand into new markets by managing every aspect of your supply chain needs giving you more time to focus on your core business.
In our prior blog post, It’s the Final Countdown to the ELD Mandate, we discussed the effects that the new regulation may have on the industry, focusing especially on shippers. Since the transportation/logistics/supply chain is not mutually exclusive, disruptions in one area of the chain can affect the entire process.
I’ve often heard that a Procurement or Logistics Director’s least favorite part of his or her job is 3PL selection. Why?
It’s simple; selecting the wrong 3PL can cause repercussions throughout the supply chain, ultimately leading to delays or outright failures in getting product into the hands of consumers, impacting sales and profits. It is your life line and one that many people depend on; stockholders, employees, their families, your customers, and their families. A broken link in your supply chain could cause loss of sales due to lack of trust and downtime, not to mention the effect it can have on your business' cash flow.
Third-party logistics (3PL) providers specialize in logistics services for shippers of all sizes from Amazon to small local businesses with a single product. 3PL companies can take over the supply chain processes that plan, implement, and control the flow and storage of goods for customers; which can also include assisting with or managing transportation, warehousing, distribution, and/or re-packaging needs from a single source, eliminating the additional expenses and time associated with setting up and managing multiple vendors. Over 86% of Domestic Fortune 500 companies use 3PL providers for logistics and supply chain functions.
Still unsure? Take a look at these five benefits of working with a 3PL partner:
Ask any human resources representative and they will tell you: Having to hire and onboard new employees is a costly event, both in terms of actual financial resources but also in less tangible ones, such as time or productivity loss.
On-time delivery is one of the biggest concerns for today’s supply and logistics businesses. Many factors contribute to delays, some of which are outside of the control of the logistics provider. From the more obvious, such as weather, traffic and delays on loading docks meeting on-time deliveries, or not meeting them, can have a critical impact on shippers and the entire supply chain.