Smart Warehousing Apr 8, 2022 4:51:31 PM 10 min read

How a Third Party Logistics Provider (3PL) Can Benefit Your Business

Excessive overhead expenses? Inefficiencies in your supply chain? They’re only holding your company back. Optimizing your entire supply chain — from fulfillment to shipping — is pivotal for any business looking to scale and drive profitability. Since well before Amazon and Zappos were household names, consumer demand has been permanently transformed. Today’s customers expect their store shelves to always be stocked, and their online purchases delivered quickly and hassle-free.

In order for your business to thrive, it’s crucial to partner with a 3PL that offers customized solutions tailored in a way that’ll drive you closer to achieving your short and long-term goals.

What is a 3PL?

A 3PL — also known as a third party logistics provider — can provide invaluable services to support your company’s shipping operations. Integrated into a business’s transportation and warehousing procedures, 3PL providers can be utilized across multiple facets of your supply chain to elevate your financial, operational, and end-consumer performance.

 

Why Choose a 3PL Partner?

Outsourcing your logistics system can include everything from warehousing to delivery. By aligning your business with a trusted third-party logistics provider, you’ll reap numerous advantages. For example, if your business encompasses high-volume shipping needs, executing a seamless logistics strategy can be costly and time-consuming.

Handing this responsibility over to a 3PL enables you to focus your efforts on high-level initiatives, such as expanding your customer base, bolstering brand visibility, and increasing your bottom line. Your time no longer has to be tied up in the nitty-gritty of daily logistics needs. And your 3PL partner will bring valuable expertise to the table, ensuring your logistics are handled with excellence.

 

What Are the Benefits of a 3PL?

While there are many benefits to leveraging a 3PL, we compiled a list of the top five benefits that encompass why engaging a 3PL is a smart move to consider in improving supply chain management.

1. A Cost-Effective Approach

If you link up with a 3PL, you will see a corresponding decrease in overhead costs. Curious how you’ll save precious company dollars? By utilizing a cost-effective 3PL, you’ll effectively reduce (or even eliminate!) costs typically allocated towards labor, transportation, and technology. Providers have a vast network of connections — providing you with the flexibility to leverage different carriers and obtain better shipping rates.

Dollars saved can be distributed to other pressing business needs, like boosting sales and implementing solutions to drive efficiency across the entire supply chain. Third party logistics providers have the technology and expertise needed to identify inadequacies in your supply chain management as well — which can allow you to curtail costly mistakes. From inventory insights to consumer demand forecasting, 3PLs can help optimize storage levels to ensure you aren’t over or understocking inventory.

2. Enhanced Customer Service

Even before the onset of the Pandemic, consumers grew accustomed to receiving ordered goods quickly. In today’s on-demand era, the marketplace expects products to arrive at their doorsteps in two days or less. Gone are the days of waiting a week or more for a package to get delivered.

By providing quicker shipping times, you’ll see a direct and positive impact on customer satisfaction and retention. Consumers want to align themselves with companies that are trustworthy and reliable — a feat that’s difficult to achieve as an individual shipper.

With a 3PL involved, however, this process becomes much more efficient. A 3PL already has an established distribution structure, and utilizing what they already have in place will help your business scale while keeping customers happy.

3. Special Expertise That Can’t Be Found Elsewhere

It’s no surprise that supply chain logistics can be perceived as complex and confusing for businesses across sectors. We’re not going to sugarcoat it: it can be overwhelming. And that’s exactly why tapping into a third party provider’s comprehensive service offerings is important for eliminating stress and driving forward momentum for your business. If you are linking up with a 3PL that has been in business for a long time, you can leverage their expertise in devising a strategy that aligns with your business goals.

3PLs will also provide invaluable insight into the specific challenges that can come with unanticipated hurdles, like traversing border customs. From shipping rates to order accuracy, aligning yourself with the right 3PL is a pivotal piece of streamlining processes and optimizing the customer experience.

4. Get Solutions for Potential Risks

After navigating the uncertainty and changes brought on by the pandemic, business leaders are well-versed in the need for solutions that are innovative and agile. And that mindset couldn’t be more true when it comes to the shipping and warehousing landscape.

Problems can arise at any time — without warning — and it’s imperative that your business has a 3PL partner that’s equipped to deal with a market that’s ever-evolving. A third party logistics company is there not only to identify potential issues, but to implement solutions designed to keep operations running without costly disruptions.

5. Enjoy the Benefits of Flexibility

After navigating the uncertainty and changes brought on by the pandemic, business leaders are well-versed in the need for solutions that are innovative and agile. And that mindset couldn’t be more true when it comes to the shipping and warehousing landscape.

 

What Are the Benefits of a 3PL?

Let’s face it: there’s an abundance of third party logistics providers out there. So, how exactly do you choose the right one? Take your time with this because it’s important to get it right! Explore our top tips to help you in your search for a 3PL that will best align with your business.

1. Assess The Volume Your Business Does

What does your shipping volume look like? This is an important factor in ensuring the 3PL you’re considering has the capacity to handle your needs. There are many 3PLs available, some operating on a larger scale than others. Assess if the provider can handle your scale of operations, regardless of whether it increases or decreases.

2. Always Check References

Just like you evaluate potential new hire references, checking the references of a 3PL is a valuable way to gain insight into their abilities. Are their customers happy? Do they deliver on their promises?

To ensure you cover all your bases, be sure to assess their ratio of on-time deliveries compared to delayed shipping, their process for tackling issues that arise, and the types of relationships they’ve built with their customers. Opting for a provider who is dedicated to developing strong relationships with their clients is imperative for driving a trusted, successful partnership.

3. Look for a Technology-Driven Company

An effective 3PL provider utilizes technology aimed at simplifying the otherwise complex logistics process. Aligning with a company that can easily integrate with the processes and technologies you’ve already implemented is essential for avoiding a massive overhaul of your supply chain.

The type of technology your 3PL offers should also help streamline and automate processes. From their inventory management system to the real-time data they can supply, look for a 3PL that actively invests in cutting-edge technology to ensure you’ll be on the receiving end of ideal service and an ideal experience.

 

At Smart Warehousing, we understand the importance of aligning yourself with a 3PL partner that can satisfy a wide range of business objectives. That’s why we create customized programs that are tailored specifically to accommodate each clients’ individual needs. When you work with us, you’ll receive the expertise needed to ensure your logistics needs are handled seamlessly from start to finish. To learn more about how our services can help your business drive profitability and reach new heights, contact us today.