The last decade has seen explosive growth in the demand for Third Party Logistics (3PL) Providers.
Manufacturers and retailers must trust their supply chains are robust. This is where 3PLs come in. A successful 3PL takes the stress out of your supply chain management and crafts the best turn-key logistics solution possible. Logistics services is all about taking your finished product from the factory to your distributer by the most cost-effective means.
Hire and Forget – Whatever The Distance
Outsourcing a 3PL transfers the responsibility of supply chain management, allowing you as a manufacturer to concentrate on production. A 3PL can handle warehouse distribution and transportation for you, integrating seamlessly with all points of your business’s supply chain. Advances in communication and computing technology have given 3PLs vast data network capability, effectively shrinking the world, and reducing the task of tracking and controlling inventory made in China but sold in the USA to a walk in the park.
Flexibility Needn’t Mean Assets
3PLs can be both asset and non-asset based, or a combination of both. Owning a large warehouse facility, for example, allows a 3PL to offer you the cheapest possible storage prices. Similar with transportation, if the 3PL owns a fleet of trucks, out goes the middleman and down goes the cost.
Often, a non-asset based approach can prove more flexible. Let’s suppose you’re experiencing a temporary volume surge in sales. Your 3PL might be avoid the option of tying up capital in more trucks when it’s cheaper to hire a hauler as and when needed for a fee.
Flexibility is key for today’s 3PL. The old blue-collar mentality of a company with a few sheds and trucks operating within a local radius has long gone. You should expect your 3PL to adjust to the ever changing requirements of your customer base. Your suppliers and buyers will inevitably come and go as better deals are struck. Your 3PL should be robust enough to integrate these changes into your supply chain management.
Logistics Services Big and Small
Usually the 3PL is required to combine a prime activity, for example, warehousing distribution, with ancillary services such as logistics planning and inventory control. Other so-called value-add services include pick and pack, order fulfilment, freight forwarding and cross docking. Smaller niche players without the resource to deliver multiple services can find themselves disadvantaged, or are often sub-contracted by the larger 3PLs. In the world of the 3PL, size and market clout certainly go together.