Outsourced logistics management seems to grow more and more popular each year — firms are increasingly seeing the value of hiring a 3PL (third-party logistics provider).
The reason for this is straightforward — a 3PL can do many things that in-house shipping departments either can’t do, don’t want to do, or don’t have the resources, expertise, or time to do.
Outsourcing in general has long been recognized as a valuable road to take for any service or business process that a company doesn’t specialize in — your company (and you) have a handful of tasks that create the most value in your business, that create the most value for your customers, and that has the highest priority.
When other tasks get in the way of this, your business, as a whole, suffers. This is one of the major reasons firms outsource anything, really — so that they can focus more completely on the high-priority, high-value tasks that the firm excels at…
That you excel at.
Outsourced Logistics Management — What Can a 3PL Do For You?
To boil it down, outsourcing with a 3PL provides some core benefits:
The main thing here is this: it makes your life easier without sacrificing quality for your customers.
For many managers of shipping departments (and just for human beings in general) there’s only so much you can do (and there’s only so far that your education, background, and experience can go) before you hit a plateau.
Hiring a 3PL can help you break through those plateaus.
3PLs offer a level of expertise that you may not have yourself or that you may not have access to in your team, which can ultimately save you money in the long run.
Access to Intimate Knowledge of the Shipping and Transportation Industry Is One of the Major Benefits of Outsourced Logistics Management
At the end of the day, you need to focus on your business and what you do best, not on keeping up-to-date with the constant changes in the shipping and transportation industry.
Things like classification changes, fluctuations in insurance requirements, changes to hazmat handling procedures — even simple changes, like rate hikes or new state and federal regulations, can be a lot to keep track of.
In addition to that expertise in the minutiae of the industry, a quality 3PL is also going to hold expertise in the simple logistics of how to transport your goods from point A to point B safely, efficiently, and at the lowest cost possible while still preserving quality.
Now, this is not in any way a small thing — it’s huge. Globalization, combined with ever-more-rapidly-advancing technology, has created a logistical reality that is extremely complex — it can be very, very difficult to determine what precise combination of links in a supply chain can be moved, coordinated, or rearranged to get the most value for the lowest price.
A good 3PL (especially one with good industry contacts) can help you do precisely that.
If you can access the technological expertise of a quality 3PL, which can help you reduce your administrative costs through the use of a quality TMS (transportation management system), while also accessing their ability to consistently choose the most efficient, effective logistical solutions to your problems...
Then you can knock down what is often one of the challenging barriers to business growth — supply chain cost.
Seasonally based businesses in particular can see huge reductions in costs when, for example, they no longer have to maintain warehouses that are mostly empty for part of the year, or they don’t have to spend time and money each year training (or retraining) administrative staff, only to have to lay them off when the season ends.
But there’s one major benefit that really trumps all the others.
Outsourced Logistics Management — Access to Industry Contacts Means That You Save Time and Money
This, I think, is more overlooked than it should be. Probably the greatest benefit to working with a 3PL is this — you’re working with a firm that has built up a huge book of contacts over years or decades, a firm who has, in effect, built its supply chains in a wide variety of industries, supply chains that are effective, efficient, and trustworthy.
They know the carriers, they know the carriers who are more expensive than they’re worth, they know the carriers who are cheap for a reason, and they know the carriers who are safe, reliable, and worth the money.
They know the other 3PLs who they want to work with (and the ones to avoid). They understand the best practices for shipping anything that you want to ship, and they know how to get it done on land, sea, or in the air.
Those contacts are truly priceless. It might take you decades to establish the same kinds of contacts, and even then, you might have no clue that a better deal was just around the corner, a better deal you might have found if you weren’t too busy focusing on the logistics of running your department or your business.
Outsourced Logistics Management May Be Exactly What You Need to Take Your Business to the Next Level
With our experience in shipping diverse pharmaceutical products, we are exceptionally positioned to assist you in discovering the ideal cold chain solution tailored to your requirements.
We’d love to talk to you about how we can help you meet your needs.
Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.
