For most companies, logistics is something they need rather than something they do. This in itself is a compelling argument for outsourcing it to a third party logistics service. Outsourcing makes even more sense when you consider the advantages of using a proper 3PL provider.
You Get Access to Logistics Experts
Experienced logistics staff are always in demand. This means that recruiting and retaining them can be a real challenge for many businesses, as hiring a third party logistics service lifts a burden from your shoulders. You simply pay for the service you need and leave your 3PL provider to deal with the practicalities of making that happen.
Your Vendor Organizes Their Own Tools
Like many industries, logistics is becoming increasingly driven by technology. This means that staying on top of the game means investing in the best solutions on the market. The first challenge is to identify what solutions are best suited to any given business. This can depend on a number of factors. The second challenge is, of course, to finance them.
When logistics is only a part of what you do, it can be very hard to work out what your business really needs. It can be even harder to justify the up-front purchasing cost (or the ongoing licensing cost). You may also have to factor in the cost of staff training. If you do, you have to accept that staff may then move on taking their training with them.
By contrast, when you use a third party logistics vendor, you get the benefit of market-leading solutions without the hassle of having to manage them yourself. Your vendor will take care of everything for you.
You Get the Use of Your Vendor’s Contacts
A specialist 3PL vendor will build up a wide range of industry contacts. These can often be of significant benefit to the vendor’s clients. At a minimum, you can deal with companies that are essentially pre-vetted by an organization you trust.
At best, you may be able to leverage your relationship with your vendor to get improved contract terms. For example, if your vendor has a bulk-purchasing agreement with a supplier, you may be able to add your purchase to theirs to benefit from a lower price.
Your Vendor Will Monitor the Industry
Logistics is in a state of continuous development. If you’re trying to fit it in amongst other business activities, then you may find it impossible to keep up. If, however, you’re using a reputable 3PL vendor, then you can be sure that they’re always on top of current rules and best practices.
What’s more, your vendor will generally tell you if there’s anything you need to know. This could be anything from a rule-change to a better way of undertaking a business process.
You Get Both Reassurance and Flexibility
When you sign up with a third party logistics provider, you get the reassurance of a guaranteed service. If there are any challenges involved in delivering that service, then they are your vendor’s problem, not yours. At the same time, you get the flexibility to scale the service up and down in line with your business cycle.