Benefits Of 3rd Party Logistics
Benefits that accrue to companies that incorporated the services of third party logistics (3PLs) providers include lower operating costs and increased efficiency. By outsourcing the transportation function to specialists, a company can focus on its primary goals without distraction or dilution of effort.
Reduction in Costs
The allocation of company resources to the purchase, maintenance and insurance of rolling stock can easily exceed the cost for services rendered by a 3PL company. Personnel costs increase the total investment in training, liability insurance and other associated expenses. The range of services offered by 3PLs includes domestic transportation, warehousing, inventory management, freight forwarding, fleet management and other essential tasks associated with logistics.
An accounting aspect of logistics allows for the possibility that shipments may not arrive on time or in good condition. A company that delegates its logistical function is able to discharge responsibility for problems that appropriately belong to the shipper.
Companies that regularly use a selected 3PL service provider can receive better pricing as a preferred customer. The establishment of a contract or account with a 3PL gives a company the assurance of the best prices, round-the-clock availability and a high level of performance that presents a professional appearance to customers.
Services provided by 3PLs are scalable and flexible. Companies that have minimal shipping requirements may choose to use a one-time service as needed. Others may take advantage of a full service operation that works closely with management to handle increasingly larger segments of logistics. Incoming inventory and outgoing shipments can occupy the time and attention of a significant number of staff within a company. Much of the work performed by regular employees can diminish as a professional logistics provider assumes tasks that are varied and demanding. Many providers have a fleet of 200 or more vehicles that are capable of transporting loads of 50,000 pounds or more.
Value-added services include an examination of transportation routes by freight experts. Domestic road conditions can affect the efficient delivery of shipments, especially those that contain over-sized loads. By detecting the presence of detours, overpasses or size restrictions, the 3PL can avoid delays and untoward expenses. Overland transport is the focus of logistic service providers, and any aspect of it that can impinge on superior performance is addressed directly. Regulations that require permits and special authorizations are strictly obeyed by professional drivers which responsibility is to deliver shipments on time every time.
The practice of outsourcing seems to appeal to companies that have a need for a work product that lies outside the expertise or capacity of salaried personnel. Increased efficiency provides lower costs and better profit margins for companies that use outsourcing to delegate liabilities.