7 Benefits of Using 3PL Services for Your Business
As your company grows and offers more products and services, you’ll have to decide whether to outsource shipping and fulfillment operations. If shipping is a top priority for your company, it is worth considering a 3PL provider. Working with a 3PL can help companies save money, improve transportation efficiency, and boost customer satisfaction. In this blog, we will explore seven benefits of using 3PL services for your business.
Benefits of Using 3PL Services for Your Business
What is Third Party Logistics (3PL)?
Before we get into the benefits of using 3PL services, let’s talk about the definition of 3PL. Third-party logistics, or 3PL, is a service that allows businesses to outsource or use third-party businesses to complete tasks in their supply chain. They are companies that provide comprehensive, even one-stop solutions for enterprise supply chains in packaging, warehousing, transportation, and order fulfillment and are known as 3PL providers.
3PLs can not only help you identify and fill gaps in your supply chain but also integrate their expertise, best practices, and technologies into your business processes to solve the most complex logistics challenges and make your supply chain a more agile, responsive function, which is essential in today’s uncertain market environment.
Here are the 7 benefits of using 3PL services for your business:
Drive Cost Savings
Third-party logistics companies specialize in logistics and, as a result, have a larger network than your company’s supply chain function. They have exclusive relationships in the logistics sector and can wield more clout during negotiations. They can also assist in offering larger volume discounts to clients. All of these can help companies save money, which is one of the most significant benefits of 3PL services.
With transportation, 3PLs are skilled at negotiating better rates with carriers by leveraging their collective order volumes and frequency. Furthermore, they can assist businesses in avoiding costly errors, allowing them to build a logistics network with lower risk and higher returns.
Maximizing the Value of Experience and Expertise
Transportation, documentation, import and export, customs, international compliance, and shipping regulations are all covered by a 3PL company. Furthermore, they are up to date on industry best practices and the most recent developments in logistics and technology. This knowledge enables them to design systems that improve the efficiency of the transportation process and easily overcome problems. This can be especially valuable as a benefit of 3PL services for smaller businesses that may not have the resources to stay current on technology and industry best practices.
Flexibility and Scalability
Another benefit of using 3PL services is that they can provide businesses with the flexibility and scalability to use resources based on current business needs. In other words, working with a 3PL makes it easier to navigate the high and low seasons because they can help you respond to changes in demand quickly. They can also scale resources like transportation, labor, or space based on inventory needs without adding risk or legwork.
Working with a 3PL also allows businesses to expand into new markets without difficulty. Those looking to expand into new markets, either domestically or internationally, benefit from the logistics support and industry expertise of a 3PL service. This reduces costly delays and cycle times, making the transition into a new region much easier.
Focus on Core Competencies
The logistics sector is complex and competitive, and it takes a long time to learn the ropes. Employees who must become logistics experts in addition to their other duties can find their time consumed by delivery coordination, maintenance, billing–and the many other daily tasks of logistics management. Bringing logistics experts on board can work, but it’s unlikely to be cheap.
The benefits of using 3PL services are significant in supply chain management. By using a carrier with ready-made capacity, a business can focus on its core competencies without having to worry about complex logistics matters in which it might not have expertise.
Resource Network
Another very important benefit of using 3PL services is their vast resource network. In logistics, networking is everything. Operational performance is dependent on having access to a large network of carriers and drivers, which requires a significant investment of time, effort, and money. Logistics partners must also be investigated. It is critical that they have a broker license, carrier surety bonds, adequate insurance, and other credentials.
A 3PL has already put in the effort to cultivate resource networks across a wide geographic area and a wide range of services. Businesses that work with 3PLs have access to these well-developed networks. 3PLs with a national or global footprint also make it much easier to expand operations into new areas because they’ve already laid the groundwork by extending their network there.
Risk Mitigation
Delays are common in the supply chain world. They can occur despite any amount of planning and communication with the driver. Working with a 3PL here has the most important benefit of having them deal with delays and damaged products because logistics is their core business. Furthermore, being insured against product loss or damage enables them to assist their clients in dealing with unforeseen circumstances in a straightforward manner.
Improve Customer Satisfaction
All of the aforementioned benefits of using 3PL services will result in improved services and response times, on-time deliveries, and increased brand reliability. This translates to happy customers, which is the ultimate goal of all businesses.
A good third-party logistics provider can ensure order pick-ups and deliveries on time, qualified drivers, and, ultimately, satisfied customers. Shippers can avoid vendor chargebacks and schedule disruptions in this manner, resulting in a more efficient transportation process.
That’s all there is to it. These are just a few of the numerous benefits of 3PL services. With so many excellent 3PLs available today, many businesses have discovered that devoting time and resources to in-house logistics makes no sense. A good 3PL can relieve a company’s logistics headaches so that it can focus on what it does best while the 3PL leverages its technology, network, and expertise.
The best businesses are powered by collaboration, and it is becoming clear that a 3PL service is an essential addition to your business.
Read more:
Shift From In-House To Outsourced Fulfillment – When it’s Better & How to Do it Right
How Third-party Logistics Services Can Ensure e-Commerce Growth?
The Top 6 Reasons For Outsourcing in Supply Chain Management For Your eCommerce Business