Owning a business is never easy, regardless of the type of industry or the size of the operation. As the person in charge it falls upon you to keep things running and to make sure everythging remains up to speed. With that being said, whenever there is a problem it is also your responsibility to pick things up and make sure things get back on track. For some, this is too much. For others though, it is the exact type of challenge they thrive with. The best of the best know that it is rarely possible or sensible to do things completely on your own. This is where employee help comes in as well as certain third parties.
Third Parties to the Rescue
Numerous businesses make use of third parties for various reasons. For one, no business can have everything in-house as it is impossible to keep things organized and up to a certain set of terms and conditions if you have to do literally everything. This is why you collaborate and partner up with other businesses that specialize in a service or skill you do not have. For the purposes of this article we isolate one such third party solution and explore the field of logistics.
Third-party logistics is a broad term that encompasses a range of services offered by logistics companies that are not directly involved with the final delivery of goods to customers. Third-party services can range from warehousing, order fulfillment and cross-docking, to distribution. All of these aspects are important for business especially if you manufacture or sell products. This blog looks at whether third-party services will benefit your business, and how to choose the right partner. Read on to learn more about this model.
What is third-party logistics?
Third-party logistics, also known as 3PL, is the transportation of goods and materials from one location to another by an entity other than the original manufacturer or retailer. Third-party logistics providers are responsible for all aspects of logistics operations, including purchasing, warehousing and distribution of goods. The original manufacturer does none of it but employs the logistics company to do it for them.
Most 3PLs offer a variety of services and the clients can hire both one or several. Their services include:
- Distribution management
- Inventory management and control
- Customer service and marketing assistance
The 3PL industry has evolved rapidly over the past few decades, as technological advances have allowed for increased automation and efficiency in the movement of goods. Today, 3PLs provide full-service solutions for many types of manufacturing, distribution, supply chain management, and transportation needs. It is actually so beneficial to businesses that fewer and fewer of them are willing to invest in their own logistic solutions.
Do you need third-party logistics?
Whether or not you need third-party logistics (3PL) services depends on the size of your business, the complexity of your supply chain, and the goals you have for your business. If you want to remain small and only focus on the manufacturing process, you will need it. If you plan to grow and take over the market, it would be smart to eventually have your own logistics team. To help you determine whether 3PL services are right for you, here are questions to ask yourself:
- Do you have a complex supply chain?
- Do you want more control over how orders are fulfilled?
- Are you looking to reduce risk?
- How much volume are you shipping?
- What kind of inventory do you have?
- How much experience do you have managing inbound and outbound shipments?
Once you got the answer for all of these questions, you should think about If you are just looking to move products from point A to point B, or you perhaps do not have a lot of inventory and need regular deliveries. As long as it can benefiot you at some point, you should be fine with in-house logistics. If not, go third-party all the way. If your business is growing quickly, has a large volume of goods moving through its supply chain, or needs regular deliveries on a set schedule (such as weekly), then 3PL services may be the right choice for you.
Finding the right partner
Now that you know more about it, it is time to learn how to pick the right business to partner up with. Finding the right 3PL partner can be a challenging task. This is because there are so many options available in the market today, which makes it difficult to know where to start. To make things easier for you, we have listed some of the things you need to look out for when choosing a 3PL partner.
- Reputation: The first thing you should consider while choosing a 3PL provider is their reputation in the industry. You can check this by looking at their website or by asking around among your friends and colleagues. Browsing the web for reviews and ratings from their previous clients is also a good way to check their background.
- Cost-effectiveness: A good 3PL partner will not only provide high-quality services but also ensure that they do not add any extra costs to your products and services. Ask about all of the costs and additional fees during the negotiation phase, or else they may add charges sometime down the line.
- Experience: Another important factor that should be considered while choosing a 3PL provider is their experience in providing these types of services. It does not guarantee a good experience but a more experienced company is always a better partner than a new business on the market.
- Get references. Talk with other companies from your sector that have used this 3PL provider before and see how satisfied they were with the service provided by this company. Or ask them to recommend the one they have been happy with for years. Either way, consult your competition.
The right 3PL partner can make a huge difference in your business. It can be said that they are prevalent for future success because shipments need to be on time and storage has to be organized. You want to be able to trust your 3PL provider to deliver on their promises and provide the services you need to run your business efficiently.
If you want to check out one of the best examples of trusty 3PL companies, gofreighthub offers everything you need from a treue 3PL partner. From warehousing and distribution to cross-docking and freight brokerage, they have it all in store for their clients. They are experts in managing all aspects of your supply chain, so you can focus on what matters most: growing your business and worrying about things other than logistics.