What happens when you fail to fulfill customer orders within a specified time frame? Obviously, it leads to negative reviews, resentful customers, and broken trust of present and potential buyers. This could end up in a nightmare situation for your business. Therefore, it is essential for smart organizations to have an efficient supply chain and logistics mechanism to prevent transportation and delivery related glitches. But for companies dealing with large volumes of goods, it is a difficult task to keep a close watch on their day-to-day business operations and the logistics aspects simultaneously. Due to dynamic customer demand cycles, businesses are looking beyond two-party logistics and resorting to 3PL, or third-party logistics, to ease the workload. Don’t fret if this is a relatively new term for you. We are here to take you through the basics and also give you a few valuable insights on 3PL to boost business success:
Who is a third party logistics partner (3PL)?
Earlier, logistics contracts had only two parties – the shipper or the owner of the goods and the shipping carriers that transport these products to their final destinations. Third-party logistics providers rose to prominence after the number of sellers in the market who do not have logistics as their core competency began budding in the market. Note that 3PL providers do not hold the ownership of the products at any point, they are only bound to the transportation contract that they have signed. The main aim of 3PL providers is to ensure that the goods are shipped to the final customers safely without any damage and within the stipulated time period.
When should you depend on 3PL?
One thing you should keep in mind is that third-party logistics should not be your go-to-option as a last resort after upsetting your customers. Consider 3PL for your business at the early stages of the order and production cycle itself. Other than the factor of not having an inbound logistics system, if you are receiving large volumes of orders than your capacity per day or if you do not have the adequate storage facilities for these orders, then you shouldn’t have a second thought on partnering with a 3PL provider. But what you need to be wary of here is the different pricing rates of 3PL providers, as this will help you make a comparison and select the one that is most feasible and profitable for your business.
Some advantages of resorting to 3PL
For those companies where logistics is not one of their core competencies, the best thing to do to boost business success is to leave the job to the pros – renowned 3PL providers in the market. By doing this, businesses can not only focus on their key functions but at the same time also ensure that they do not have to take the headache of any logistics related risks and bottlenecks. Also, expanding business operations internationally is not an easy task for companies, especially considering the large number of shipment and cross-country regulations. However, reputed 3PL providers have their presence in the international markets and are also equipped with the necessary international trade licenses. Therefore, it becomes easier for companies to ship their goods abroad with the help of 3PL logistics. An additional benefit of hiring third party logistics providers is that companies can avoid the additional warehousing and storage cost of goods as they are taken care of by the logistics providers.
To know more about the role of 3PL in boosting business success