Logistics are the backbone of your business. When you think about it, any business can be defined by its logistics.
If you’re a manufacturer, logistics is about getting raw materials and finished goods where they need to go for your company to function correctly.
For retailers and wholesalers, logistics is about how orders are processed from point A to point B to give customers what they want with as little delay as possible.
Ultimately, the goal of any company’s logistics plan is the same: make sure that products arrive on time at their intended destinations without fail, then take corrective action before another problem arises in this highly complex process.
If you or someone you know is starting a new business, here is all you need to know about 3PL (third-party logistics) providers and how they help logistics in a big way.
Shipping and receiving
Shipping and receiving is the first step in the logistics process. It involves receiving shipments from suppliers, delivering them to customers, and moving goods between locations within your organization. You can think of it like an assembly line: you start with raw materials, add labour, and then make things happen until they’re ready for sale or use by another company.
The State of Shipping Report 2022 states that 62% of shoppers want their orders to be delivered in less than three business days. The importance of shipping and receiving must be balanced. If this part of your business isn’t handled correctly, it can have severe consequences for customer satisfaction and overall success.
With so much riding on getting this right every time, it’s no wonder many companies choose third-party logistics providers (3PLs) to handle their shipping needs instead of doing everything themselves.
According to Technavio, the worldwide warehousing and distribution logistics market is expected to grow by $72.96 billion from 2023 to 2027. Warehousing management is a crucial aspect of logistics, and there are many ways that 3PLs can help you save money and improve efficiencies. 3PL providers can help in various ways to optimize warehouse management.
Here are some ways 3PL can help in warehousing management:
- Efficient use of space. 3PL providers are experts in warehouse management and can help businesses make the best use of the available space in their warehouses. They can help organise inventory, optimise storage space, and use advanced technology to ensure efficient storage and retrieval of goods.
- Streamlined operations. 3PL providers can help businesses streamline their warehouse operations by implementing best practices, standard operating procedures, and advanced technologies. It can help businesses reduce operational costs and increase efficiency.
- Improved inventory management. 3PL providers can help businesses optimize their inventory levels, ensuring they have the right stock at the right time. They can implement inventory management software, use data analytics to forecast demand, and employ advanced techniques to manage inventory levels effectively.
- Cost savings. Outsourcing warehousing to a 3PL provider can help businesses save costs by eliminating the need for warehouse infrastructure, technology, and staff investments. 3PL providers can also offer economies of scale by consolidating multiple clients’ inventory in one warehouse.
- Scalability. As businesses grow, their warehousing needs change. 3PL providers can help businesses scale up or down their warehousing operations based on their needs without significant capital investments.
As a business owner, you are probably familiar with the importance of maintaining an optimal inventory level. You want to ensure you have enough stock when your customers need it, but not too much to risk overstocking or wasting money on unnecessary inventory. According to Capegemini, 74% of businesses experience shipment delays that can be avoided with inventory control.
As a result, many companies turn to 3PL providers to help manage their supply chain operations. These companies employ experts who can help ensure your supply chain runs smoothly and efficiently, from receiving goods at the warehouse to shipping them out again once customers have purchased them.
Distribution management, transportation planning, and scheduling
Logistics handling is essential for many businesses, whether you’re an eCommerce business shipping products across the country or an auto parts manufacturer sending shipments to your distributors.
3PL providers can help you manage all these logistics processes and ensure they are handled correctly. They can also offer other services such as distribution management, transportation planning and scheduling, tracking and tracing capabilities, consolidation services, and transfer requests between carriers or modes of transportation.
Load tracking, freight consolidation, and transfer
Load tracking is a critical function for any logistics provider, as it allows you to track the progress of shipments within your supply chain. Load tracking can be done manually or automatically using barcodes and RFID (radio frequency identification) technology.
Freight consolidation involves combining multiple orders into one shipment to reduce costs. It benefits both the shipper and receiver because it reduces transit time and improves efficiency through reduced handling at each stage in the process.
Transfer refers to transferring goods from one carrier or mode of transportation onto another carrier or mode within an organization’s supply chain network. It can help reduce costs while increasing service levels by ensuring that goods are always available when needed, regardless of where they’re coming from or going.
3PLS can help you manage your logistics to save money, time, and energy
3PLS can help you save money by reducing shipping costs. They offer lower transportation rates than traditional carriers and special discounts for large-volume shippers. They also provide customized solutions that fit your business needs so that you only pay for services necessary for your business model.
3PLs also reduce the time spent managing shipments by providing online tools, including real-time tracking information so that customers know where their goods are at all times; this way, there are no delays due to miscommunication between parties involved in shipping procedures.
We hope you’ve enjoyed this overview of 3PL providers and their services. As you can see, there are many benefits to using a 3PL provider to handle your logistics needs. They can help you save money, time, and energy by taking care of everything from shipping and receiving goods at warehouses to managing inventory control and distribution management.
Zuella Montemayor did her degree in psychology at the University of Toronto. She is interested in mental health, wellness, and lifestyle.