Beginning in the 1970’s and continuing as a growing trend throughout the 80’s and 90’s, many retailers and manufacturers expanded their operations to include logistics; seeking to manage costs by controlling inventory along the entire length of their supply chains.
Today, tech-savvy e-commerce providers like Amazon can far outpace the speed at which most retailers and manufacturers can move their goods to the point of sale. It is has become very difficult for companies to effectively compete with e-commerce providers plus manage their payroll and benefits-related expenses, as well as cope with rising fuel costs. To remain competitive, many businesses have opted to cut overhead and streamline operations by divesting themselves of their logistics operations and outsourcing freight-handling to third-party logistics (3PL) providers.
What are the benefits of choosing a third-party logistics broker?
A 3PL’s strength is that freight-handling is their sole focus. A business that chooses to outsource supply chain management to a broker can experience an immediate cost savings. There is no need to hire, or manage drivers and dispatchers; no need to own and insure a fleet of trucks or warehouses and no need to worry about maintaining State or Federal regulatory compliance..
A third party logistics broker located in a port city with easy freeway access means that a business can trust that their goods will be rapidly transported to the point of sale; allowing them to enjoy an immediate improvement in their overall operational efficiency and capacity.
A 3PL handles all warehousing and freight security issues reducing business overhead and improving a company’s bottom-line.
In addition, 3PL companies know they have to stay on the cutting edge of new technologies to compete, all of which benefits shippers.
Which 3PL is best for my business?
Selecting the best 3PL will depend on several factors. It is a good idea to select a 3PL with easy port and freeway access. A 3PL with a well-trained technologically capable staff having the ability to securely warehouse freight is another important consideration.
It is well to consider the 3PL’s ability to satisfy time-sensitive delivery targets. How flexible is the broker? Can they accommodate customized delivery requests? Can they seamlessly handle last-minute schedule revisions with minimal supply-chain disruption? How will modifying the delivery schedule affect the pricing?
Is the 3PL able to grow with your business and can they save you money by reducing operational capacity when needed? Does the 3PL use the latest technology?
A 3PL’s financial viability is key to ensuring that your partnership with them will stand the test of time.
Evaluating the partnership
The business should also agree with the 3PL which measures will be used to determine success or failure, how often feedback is provided and who on both sides will be accountable to address potential problems as they may arise. Will there be a probationary period? How long is the time frame that will be given to evaluate success? If necessary, how would the relationship be terminated?
Ultimately, the best 3PL for you should allow you to maximize your business operations at a reasonable cost, freeing your company to concentrate on creating the goods and services it provides to the public. Port City Logistics a Savannah GA logistics broker can help! Contact us today.