3PL or third-party logistics providers are firms with experience and expertise in handling and shipping goods. They hire the best supply chain managers and engineers, combining brilliant minds with state of the art technology to get the most efficient supply chain possible. A 3PL firm can have higher reliability, lower inventory levels, higher capacity utilization and shorter delivery times compared to a solitary shipper for various reasons. Here are several benefits of utilizing a 3PL company.
Freight Carriers Compete for Third-party Logistics Clients
Given the fact that third-party logistics companies contract with several carriers, they can provide an array of service levels & transit times. As such, shippers tend to take advantage of increased sailings per week. This means that third-party logistics firms can offer better booking options and service types as they have many contractors available to them.
Also, since carriers heavily compete with each other for 3PL business, you can have greater leverage and bargaining power than an individual shipper. This opens a door to more competitive rates, reduced demurrage, greater free time allocation, etc.
Greater Control & Better Information
Third-party logistics companies utilize state of the art software to route and track all their business. They hire the best talent in the engineering industry and computer scientists to personally manage their accounts. Through the coordination for all transportation modes and supply chain processes, they’re able to combine and report different data via value-added information services.
They provide better control via vendor relationship management and communicating proactively with suppliers overseas to ensure everything goes according to plan. These firms ideally provide performance reports so that you can see how much you are saving and in what areas.
As you can see, there are numerous benefits of using third-party logistics companies. If you find your logistics overwhelming, it might be time to leave the task to a reputable 3PL firm.