Partnering with an optimized 3PL company is essential and the best solution to cutting down your costs. In the recent turn of events, the e-commerce business has grown and advanced to a necessity and an essential element for living. With the high percentage of the population working from their home office, a third-party logistics company can offer a wide range of services. The chance to avoid the high payments is crucial for advancement, and it is your best bet if you need to keep up with the increased demand from your customers.
As a fundamental link in the supply chain, the logistics department offers services that can resolve or minimize imminent issues. They may include order management and fulfillment, inventory control, storage, transportation and trucking, heavy-duty handling, reverse logistics, etc. No matter in what way or manner big your trade is or what are your management needs, contracting out a 3PL can help accomplish the duties your business demands for a reasonable price. The ways you can use a 3PL to cut your costs are many. However, in this post, our team will analyze five of them, giving you a great reason to consider outsourcing for your company’s benefit.
1 Lower shipping rates.
An excellent 3PL operator negotiates the shipping rates much better than you as an entity. As an experienced competitor on the market, your logistic partner creates a discovery process where it analyzes your shipping data compared to the services they offer. Your 3PL partner works with multiple customers simultaneously. This influences the pricing, which is usually based on order capacity and volume, and helps you secure better rates. Naturally, their business network is large and diverse, so the fulfillment providers will always be able to negotiate better rates.
2 Warehouse space.
Due to the cooperation with a vast network of clients, advanced 3PL companies offer shared warehousing services. The importance of this feature is that you don’t need to pay rent and maintenance for a whole warehouse, but only per the volume you use at the moment. Once your business grows, you can negotiate with your partner more space for a better price in proportion to your demands. The key takeaway is that you will have firsthand experience with other companies that share the same warehouse. It is an excellent way to check the reviews and know the type of 3PL you are dealing with.
3 Optimize drayage.
The third-party logistics operations usually offer direct handling of the intermodal and drayage services. Information is key, and a 3PL company can help improve the activities that cause interruptions in the daily processes. By offering specialized management software, your 3PL provider will be able to provide visibility and control as soon as the container ships. Moreover, you will be able to coordinate and redirect containers to their precise fulfillment center.
4 Order management.
A third-party logistics company usually operates with integrated software that offers network optimization and trucking processes. What does that mean? Managing a package’s lifecycle starts from the order entry and ends with the delivery. The software also gives access to both the customer and the business to be able to track all the processing information and the activity of the order. Moreover, many companies offer a messaging platform between the buyer and the seller, which is an advantage when the customers need to contact the business directly.
5 Reverse Logistics.
Returns are inevitable, and they must be managed accordingly. Every time a company sells a product, there is a chance of that product returning to the seller. A 3PL company will help you identify and process these returns, which takes plenty of time off your hands to concentrate on the core competencies of your business. Moreover, a 3PL has specifics and requirements regarding the disposal and destruction of obsolete material that make it unique when it comes to sustainability. Their eco-friendly programs ensure that the products worthy of reusing or recycling end up in the right place. This also helps reduce waste, which is one of the most significant factors in saving the environment.
It is certain that if you decide to individually hire a certified expert for all services that you need in your daily operations will cost an arm and a leg. When collaborating with a third-party logistics company, all the expertise comes in a bundle for a much lower price. The responsibilities a 3PL business takes demand staying up to date on the best practices in the industry. This especially applies to providers dealing with specific products that require special handling equipment. Furthermore, the peak performance mainly demands additional labor, which the 3PL directly provides. It can eliminate the time-consuming practice of training and hiring new employees.