Why Technology-Rich 3PLs Keep Costs Lower for Shippers

Posted by Port City Logistics on May 18, 2022 2:17:23 PM

There are many questions to ponder in logistics, including what is a 3PL and how it can help my business thrive? The answers rest in both consolidated freight shippers’ services and outsourced expertise. Freight rates will likely continue to rise through the remainder of 2022, according to Business Insider. “The Freightos Baltic Index — a measure of global shipping prices — sat at $9,488 on March 18, meaning it cost nearly $10,000 on average to ship a 40-foot freight container. That’s almost seven times higher than the March 2020 reading of $1,400. While that’s down from the highs seen in the fall of 2021, it’s still holding at extremely elevated levels.”

Many companies are optimizing budgets by using 3PL companies who provide consolidated freight shippers — splitting the bill with other companies by sharing one container to be ready for disruption. 3PLs leveraging modern technology, including services like automated alerts to keep shippers informed, is on track to take the supply chain by storm. 

Today’s shippers could achieve lower shipping costs, and it’s essential to understand how a tech-rich 3PL makes that happen. 

How 3PL Technology Helps Shippers

A 3PL’s technology value for logistics is best seen in the use of consolidated freight services. Using technology to track LCL versus FCL and associated drays, local warehouses serve as a resource to help shippers cut costs. This occurs through several processes, including:

  • Improved analytics and insights. Real-time dashboards to track KPIs, powered by analytics and initiative-taking management of all trucks, provide a quick, up-to-date, and cost-effective route to the destination.
  • Enhanced collaboration and networking. Smaller shippers can keep up with larger competitors by collaborating and outsourcing cross-docking port drayage management and staging of container movements to 3PL companies. Enhanced integrations allow many networks to connect and boost the overall organization.
  • Better troubleshooting and diagnosis. 3PLs use their modern technology and an in-house IT team to solve issues quickly and effectively.
  • Faster response to disruptions. With modern technology providing real-time updates to the organization, 3PLs will catch critical errors and mitigate disruptions quickly. This helps to reduce the risk of costs by improving local port congestion.
  • On-demand tracking and monitoring. 3PL software provides drivers with real-time updates on the shortest routes, traffic notifications, and unforeseen weather issues. This alleviates risk and avoids delays.
  • Better time and resource management. A 3PL relies on experience, capacity, and networking skills with a broader driver pool to minimize shippers’ responsibilities and the speed to unload a container ship

How Technology and Automation Impact the POST-COVID Supply Chain

COVID has stimulated a massive, ever-lasting change in how the supply chain functions. As a result, more companies have evolved to do more with less, but what is a 3PL’s value in such tumultuous times?

As an example, expert drayage provider 3PLs are using technology to empower shippers with real-time status alerts and actual management by exception. They’re eliminating the busywork behind all interactions and using staging tools to know when to consolidate loads into FCLs to reduce container turn times. They’re also keeping everything organized and using data to light the way forward. 

Financial Benefits of Working With Technology-Rich 3PLs

Depending on the source, some customer service teams have even experienced increased productivity ratings of up to 90% or more simply with more visibility and consolidation. Topline benefits of consolidated freight shipping  and effective management include:

  • Lower back-office costs. 
  • Data-driven management. 
  • Fewer errors or missed pickups/deliveries. 
  • Better customer experiences.

Explore the Benefits of 3PL Technologies for Consolidated Freight and Shipping Execution

The state of the supply chain is in continuous flux. Past and future demands create massive challenges, and the story of capacity constraints or fluctuations continues to evolve. However, today’s shippers can realize significant improvements in efficiency and cost savings by partnering with the right 3PL. Port City Logistics has the warehousing and drayage fulfillment expertise needed to lessen the impact of strain on the East Coast without breaking the bank. Connect with Port City Logistics to get started today.

Topics: asset-based 3PL companies