Oct 30, 2024
No matter which industry you come from or what company you represent, if you sell and need to distribute products, the best solution is to outsource logistics services. This often leads to partnering with a Third-Party Logistics provider, also known as a 3PL, the star ally in eCommerce, storage, distribution, and more.
Over the past decades, logistics services have been greatly improved through technology and more organized systems that optimize inventory management and ensure the right product is delivered to the right person, following the right process. But how easy is it to implement this dynamic system in small, medium, or large companies? This is something a 3PL can do for any business, allowing them to focus on strategy rather than worrying about the delivery process.
According to the 2024 Global Transportation & Logistics Industry Report from Benchmark International, eCommerce sales are projected to reach $6.3 trillion this year. Online shopping has become the “norm” since the pandemic. Now, people require logistics companies to deliver faster and more efficiently, and there is a growing need to cover returns, same-day delivery, and more specialized services that only a 3PL can efficiently manage.
One of the primary and most important benefits of partnering with a 3PL is cost savings. Third-Party Logistics Providers already have the workforce, infrastructure, management, facilities, and systems in place, so companies don’t need to worry about these aspects. Having all these needs met by a single provider significantly reduces operational costs.
When you work with a 3PL, you also gain access to advanced technology and automation, as these providers invest in systems to deliver integrated services to all their clients. That’s why when partnering with a 3PL, businesses benefit from tools like Warehouse Management Software (WMS), automated picking solutions, inventory management systems, voice-picking technologies, labeling solutions, and more.
Regarding transportation, 3PLs handle large volumes of orders and can negotiate the best rates with carriers. Today, customers are heavily influenced by shipping costs and delivery times, which are key factors when making a purchase. Therefore, controlling shipping costs by using a 3PL that covers everything is essential for any business.
Some companies choose to handle their logistics internally, which may involve owning their own fleet of trucks and maintaining a dedicated team to dispatch all orders, rather than outsourcing logistics management. However, creating an in-house logistics process is a huge challenge—it requires a substantial portion of the budget and additional staff to build a focused team.
Moreover, brand reputation is at stake. 80% of customers claim that after just one bad delivery experience, they won’t use a brand again. If a company fails to provide the timely deliveries they promise, it can harm their reputation. In today’s world, where every customer is a potential influencer with a smartphone and social media, not meeting customer expectations can become a major issue.
On the other hand, outsourcing logistics to a 3PL offers customized pricing based on service usage, making it an excellent solution for low-demand periods. As mentioned earlier, companies gain access to advanced technology and innovative strategies without needing to invest in infrastructure, resources, or staffing.
By partnering with a 3PL, you tap into a wealth of logistics expertise and industry knowledge. These professionals provide best practices to optimize your process from point A to point B. Their specialized knowledge ensures that solutions are designed to streamline your supply chain, and most importantly, businesses can avoid costly mistakes that may arise from a lack of knowledge or experience.
Additionally, 3PLs act as strategic partners, helping companies comply with the regulations and documentation needed to operate with excellence in logistics.
In the 2023 3PL Statistics Report by LLC Buddy, it was noted that “86% of American consumers utilize at least two channels and interact with electronic media for up to 11 hours each day,” which highlights the importance of a strong digital presence for all businesses. It also strengthens the need for excellent customer service across all these platforms.
To manage multiple clients and businesses efficiently, 3PLs equip themselves with technology systems that streamline processes, improve operational performance, and reduce delivery times. These systems also offer customers the visibility to track their orders from anywhere.
Technologies like eCommerce integrations that synchronize data across multiple channels, Warehouse Management Systems (WMS) for inventory, picking, packing, and shipping, and Inventory Management Systems (IMS) that track inventory across the entire supply chain are just a few examples. Additional tools like Automated Order Fulfillment, Returns Management Systems, and Automated Payment Reconciliation make partnering with a 3PL essential for companies that want to offer the best customer service.
3PLs understand that companies experience fluctuations due to seasonal periods, market dynamics, and other factors. That’s why they are prepared to scale operations up or down based on demand, adapting to changes in business throughout the year. The flexibility of 3PLs allows companies to utilize space and resources when needed.
They are also prepared to support business growth, helping companies meet additional needs as they expand. This helps avoid delays, excess inventory costs, and common mistakes during periods of growth. 3PLs can also assist businesses in expanding into different regions, providing the best service across various locations.
As previously mentioned, partnering with a 3PL allows businesses to focus on their core competencies, such as manufacturing, marketing, product development, and more, which enhances customer satisfaction.
Logistics processes are fraught with risks that can disrupt the efficiency of the supply chain. Identifying and addressing these risks in a timely manner is one of the most valuable services a 3PL offers to companies.
Some of the primary risks include disruptions caused by natural disasters, economic shifts, or geopolitical events, which can increase costs or cause delays. 3PLs have contingency plans to mitigate these impacts while providing flexibility to maintain operations.
Cybersecurity threats are also a growing concern, as technological advancements have led to increased risks, particularly in terms of customer data breaches. Changes in regulations regarding transportation, customs, or other logistical processes further emphasize the need for a 3PL to handle these situations efficiently, anticipating potential risks.
3PLs are well-prepared to plan, integrate technology, and continuously improve their processes through strong contractual agreements, robust cybersecurity protocols, diversified transportation routes, and more.
In today’s interconnected world, the need for efficient and reliable international logistics has never been greater. Third-Party Logistics providers (3PLs) offer businesses the expertise needed to navigate the complexities of global shipping. 3PLs have the infrastructure and knowledge to facilitate international logistics by handling every aspect, from customs clearance to compliance with regional regulations. They simplify the process of moving goods across borders by managing paperwork, ensuring the proper tariffs are paid, and preventing delays at customs.
For companies looking to expand into new markets, partnering with a 3PL is a strategic advantage. A 3PL’s established network of warehouses, transportation routes, and relationships with local carriers allows businesses to enter new regions seamlessly. Whether shipping to Europe, Asia, or Latin America, a 3PL can provide localized solutions that meet the unique challenges of each market, including regulatory differences, local consumer expectations, and supply chain logistics.
Leading 3PL providers also excel in global supply chain management, offering real-time visibility into shipments and inventory across multiple countries. This transparency enables businesses to manage international orders efficiently, ensuring on-time delivery and customer satisfaction on a global scale. The global reach of a 3PL provider transforms what could be a logistical headache into a streamlined process.
As environmental concerns become more pressing, businesses are looking for ways to reduce their carbon footprint—and 3PLs are helping lead the charge in green logistics. Many 3PL providers adopt practices that prioritize sustainability, including designing efficient delivery routes to minimize fuel consumption and lower emissions. By optimizing transportation networks and consolidating shipments, 3PLs reduce the number of vehicles on the road, thereby decreasing the environmental impact.
The adoption of green technologies is also a hallmark of modern 3PLs. Providers are integrating electric vehicles (EVs), hybrid trucks, and alternative fuels into their fleets, reducing their carbon emissions significantly. In addition, 3PLs are implementing energy-efficient warehouse practices, such as using solar power and LED lighting, to further enhance their commitment to sustainability.
Through these practices, 3PLs are critical in helping companies achieve their sustainability goals. By outsourcing logistics to a 3PL, businesses can reduce their carbon footprint without sacrificing efficiency or cost-effectiveness. In fact, leveraging a 3PL’s green logistics solutions can improve profitability and environmental responsibility. Custom Goods is the top choice for your business logistics needs, thanks to its dedication to excellence and environmental responsibility. Whether it's warehousing, inventory management, transportation, or order fulfillment, their expertise and cutting-edge technology guarantee that your logistics operations operate seamlessly and efficiently.
Collaborate with Custom Goods to optimize your supply chain, lower costs, and concentrate on what you do best: expanding your business.
If you need help with your logistics processes, please contact us. We are here to support you fully!
By Christian Herc