5 Reasons You Should Hire Third-party Logistics Services


Think of venturing potential markets, broadening your clientele or generating impressive customer experiences. Small or big, established businesses or startups: you simply cannot ignore 3pl logistics services in the age of competitions.

Identifying loopholes in your supply chain involves a strategic approach. Uncertainty largely dominates the contemporary market environment Read on to understand the strategic benefits of hiring 3rd party logistics services from an established company.

Third-party logistics (abbreviated as 3PL, or TPL) in logistics and supply chain management is an organization’s use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.

Third-party logistics providers typically specialize in integrated operations of warehousing and transportation services that can be scaled and customized to customers’ needs, based on market conditions, to meet the demands and delivery service requirements for their products. Services often extend beyond logistics to include value-added services related to the production or procurement of goods, such as services that integrate parts of the supply chain. A provider of such integrated services is referenced as a third-party supply chain management provider (3PSCM), or as a supply chain management service provider (SCMSP). 3PL targets particular functions within supply management, such as warehousing, transportation, or raw material provision.

The global 3PL market reached $75 billion in 2014, and grew to $157 billion in the US; demand growth for 3PL services in the US (7.4% YoY) outpaced the growth of the US economy in 2014. As of 2014, 80 percent of all Fortune 500 companies and 96 percent of Fortune 100 used some form of 3PL services.


1.Seamless cost management
Third-party logistic support companies ensure that you derive value from their carriers. A survey reveals that as much as 81% of the companies outsource some part of their domestic transportation requirements to 3PL service providers.As compared to individual shippers, 3PLs enjoy a greater degree of control with trucking companies. Based on the frequency of orders or volume, these companies negotiate the pricing and gain incentives.

Besides, these companies effectively slash down costs and enhance the effectiveness of your operations.It would, therefore, be wise to hire experts to evaluate, monitor and optimize each operation round the year.

2. Enhanced network capacity
How about handing the responsibilities like screening the equipment careers, qualifications and insurance? Seems challenging?
Hiring an expert for third party logistics services ensures that the professionals would tirelessly work to select only reliable service providers. The reputed companies come with powerful carrier networks. They would help you connect with the right people. With qualified networks, these companies can enable you secure a greater capacity. With thousands of contacts, they can customize the right solution for you.

3. Enjoy scalable services
Collaborating with a company offering third party logistics services, it becomes easier to deal with the low and high sessions in business. They provide comprehensive yet scalable services to their clients. In case you experience an increment or drop in demand, they would scale the necessary resources accordingly.One of the perks of working with 3PLs is their nationwide connection. This enables them to respond seamlessly to flux. Eventually, you can accomplish much more at a faster pace.

4. Access to technology
Working with a third-party logistics partner, you can minimize costs associated with implementing advanced technologies. In the process, you can manage the maintenance and upfront expenses more smoothly. Actually, these specialist companies share their resources with multiple clients, thereby slashing down the investment. Here are some of the technological advantages you can enjoy:
• Real-time tracking of orders
• TMS (Transportation Management Systems)
• Reporting and data analysis tools
• Consolidation optimization tools
• Route optimization tools
• Freight payment and audit solutions

5. Focus on core competencies
Without the right mechanisms in place, transportation can be a time-intensive affair. A dedicated operations and supply management provider can make the tasks easier for you. While they take care of your logistics and transportation requirements, you can concentrate on the core competencies of your business. Besides, you need not make any investment on logistics personnel to monitor daily activities like transportation. Your 3PL service provider would manage these tasks with professionalism.

Here are some basic tasks which they can help you with:
• Facility and driver communication
• Performance reporting
• Paperwork and billing
• Issue management
• Tracking orders
• Scheduling pick-up appointments
• Finding and booking the right mode and service provider (rail, reefer, truck or LTL)

Gaining a competitive advantage over generic houses calls for a dedicated support from third-party logistics providers, also referred to as 3PL providers. Whether you need assistance in transportation, warehousing, packaging or order fulfilment, you would find operations and supply management services from professional companies relevant.

Article Source: https://www.123articleonline.com/articles/1198752/5-reasons-you-should-hire-third-party-logistics-services