3PL Benefits That Boost Your Bottom Line

Third party logistics companies, otherwise known as 3PL’s, have become nearly commonplace these days. Certainly not all companies find the need to use them. However, if your company is considering outsourcing functions to a 3PL, there are some critical categories to explore that can help facilitate your decision. This is true not only in your primary decision making process to outsource transportation and logistics functions, but also in choosing a reputable and proficient 3PL that will serve your company best.

Who Needs A 3PL?

First and foremost to think about is the desire to reduce costs while getting shipments to market as reliably and quickly as possible. Using 3PL companies who specialize in logistics are notably far more efficient and cost-effective then performing the warehouse and logistics in-house. Since the 3PL industry began in the 1970’s, with the expansion of global markets, has increasingly skyrocketed. Remarkably, 3PL companies have generated over $100 billion in the U.S. market alone. Given this figure, it is easy to speculate that specialization in and of itself can create economies of scale.

How might they do this? One way well run 3PL companies do this is to contract with thousands of transportation carriers. Not only can they draw on the most cost-effective provider, they also have the ability to access whichever carrier can deliver goods the fastest. Plus, because a 3PL has ‘shipping volume’ they can negotiate better prices than a single company on its own.

In addition, a reputable 3PL has reduced infrastructure investments, specialized equipment and labor force. Shipments can be sent by truck, air or rail, for example, and having sophisticated transportation managers who make the most cost-effective decisions for your shipping needs at the best price available provides management expertise not always an option within your own company.

3PL Software as a Service

Further, because 3PL’s have a focused warehouse, inventory and logistics focus, most operate using a well-designed transportation management system (TMS) and warehouse management system (WMS). Any 3PL who uses a web-based inventory management platform can be highly effective in providing real time information thereby saving your company time and dollars.

As example, Software-as-a-Service, or SaaS, has become increasingly inexpensive, user-friendly, and readily accessible with a computer or laptop. Proficient programs like that developed by 3PL Central, offer pay-as-you-go advantages with no long term contracts required. Since the 3PL provides software designed for multiple users and is updated by the provider, modern day 3PL’s can now offer highly sophisticated inventory management and accounting functionality at a fraction of the cost of an in-house software package.

Visibility is a key feature and critical benefit offered by SaaS providers. When all relevant users have access to inventory levels and key warehouse events in real time, efficiency is maximized and customers have information they need when they need it. In addition, many 3PL software providers such as 3PL Central offer both standard and customizable reporting functionality with inventory effectively managed through mobile barcode scanning and RFI tools.

Third Party Logistics Software for B2B

Finally, having accounting functions that capture all billable events eliminates revenue loss potential and is effectively handled by sophisticated web-based systems. Full order management with direct EDI support along with either manual or excel import capability further facilitates the system.

So if your company is looking to reduce both warehousing and logistics costs and benefit from enhanced economies of scale that improves your bottom line, you will likely want to consider selecting a quality 3PL.

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