Third-party logistics, sometimes known as 3PL, is a company specializing in supplying warehousing and shipping services to other businesses. This enables you to focus on other areas of your business rather than the time-consuming and costly logistics.
Often, a 3PL provides services covering warehousing, picking and packing, order fulfillment, inventory forecasting, and freight forwarding. There are countless benefits of third-party logistics, and we’ll discuss the main ones in this article.
It’s More Cost-Effective
A third-party shipping company usually has contracts with multiple companies, meaning they’re handling thousands more products than you. As their volume is greater, they’re able to negotiate preferential rates with couriers, and by driving down the amount you spend delivering products, you free up cash to be spent elsewhere in the business.
Reduce Risk & Solve Issues Rapidly
Delays happen, parcels get lost, and problems occur. Sometimes, this can cause a headache for your employees, but one of the benefits of 3PL is that they have to find resolutions to these problems. Furthermore, with their knowledge, experience, and network, they’re able to find preferential solutions faster than you would be able to.
Learn From The Experts
If you’re a new business, stepping into the world of logistics for the first time can be confusing, daunting, costly, and time-consuming. Working with a third-party shipper gives you time to learn the ropes, understand how processes work, and potentially give you the insight you need to implement it internally one day.
Be sure to ask questions and engage with the experts. You may decide you always want to use a 3PL. Either way, you’ll be giving yourself and your team more time to focus on improving other areas of your business, which is always a win.
Seasonal Flexibility
If you operate out of your own warehouse and manage your own logistics, you have the same cost all year round, no matter if you’re handling the same volume of products. With a 3PL, you can run seasonal shipping very easily. They simply allocate less warehouse space and resources to your contract, reducing your costs and saving precious budget during quieter months.
Less In-house Employees
A third-party shipping company has all its own staff, meaning you don’t need to employ everyone needed to run a streamlined logistics operation. Furthermore, this means you don’t have overheads such as salaries, vacation pay, healthcare, and other additional employee benefits.
In Summary
If logistics is an important part of your business, and your customer experience relies on it, it’s always best to get the experts involved. You’ll spend less money, save time, and be able to dedicate resources to improving the areas of your business that suit your expertise.