Outsourced Logistics for Enterprises

Why Outsource Logistics?

Enterprises may believe that they can handle their logistics in-house once they have the manpower and budget to power it. However, that couldn’t be further from the truth! The more obligations and responsibilities an enterprise has, the harder it is to maintain control over their supply chain and any disruptions that occur along the way.

This is why companies choose to outsource their logistics operations: it allows them to delegate tasks to a third party who manages storing, packing, and shipping products while adhering to the contract established between the company and the 3PL. Meanwhile, companies can shift priorities to the rest of their business, leaving the logistics side to their 3PL providers.

Some of the other benefits of outsourced logistics for enterprises include:

• Cost-Effectiveness: 3PLs negotiate deals with suppliers and carriers to secure lower rates for their customers. They also work to reduce shipping costs by optimizing transportation routes to minimize distance traveled and by providing more affordable shipping options, such as LTL shipping.
• Multiple Shipping Options: 3PLs provide a variety of solutions for a business’s needs, from various shipping options like LTL, truckload, and intermodal; shipping modes like rail, ocean, truck, and air shipping; and other specialized equipment and services.
• Innovative Technology: 3PLs integrate advanced technologies and innovations into their systems like tracking programs and AI-led software. This allows for greater transparency and control over the logistics process, while also speeding up production through automated systems.
• Global Network: 3PLs build impressive networks of domestic and international carriers and related partners. This is helpful for businesses expanding their reach or streamlining their services, as these global partners can assist companies with customs clearance, import/export restrictions, and cross-border shipping protocols.
• Risk Management: 3PLs are flexible and resilient against supply chain disruptions. They rely on their extensive knowledge of the industry to reduce risks and find creative avenues around them, avoiding legal penalties and customer dissatisfaction in the process.
• Dedicated Logistics Support: 3PLs employ hands-on customer support to assist enterprises with any issues or complications they come across during their freight shipping experience. Businesses don’t have to worry when something goes wrong during operations; they have all the help they need to be successful.

How to Choose an Outsourced Logistics Provider

If you have chosen to outsource your logistics operations to a 3PL, then you are one step closer to effectively managing your supply chain and getting ahead of your competitors. However, how do you choose the right 3PL for your business needs?

No two 3PLs are the same; each provider has their own unique strengths, experiences, and services they offer. When determining which 3PL is right for your business, ask the following questions:

1. What are my enterprise’s needs? Why are you outsourcing your logistics in the first place? Evaluate your current business objectives and outline what your short- and long-term goals are. What your team wants to accomplish will narrow down the list of 3PLs to research.

2. What is the 3PL’s core services? Look for providers that serve in industries you are a part of, what their specializations and certifications are, and what core services do they provide that align with your business objectives. It may also be helpful to focus on the 3PL’s specialty. Do they have strong LTL shipping, or are they better at international shipping?

3. How is their reputation? Explore their track record through current and past reviews. You can also find their mission statement, a list of their industry standards, and any initiatives they have for continuously improving their services.

4. What technologies do they utilize? Are they dabbling in the latest innovations in the industry, or are they relying on user-friendly, but old-fashioned technologies? See how the 3PL handles real-time tracking, data analytics, and supply chain visibility through their software and digital tools.

5. How robust are their security and compliance measures? Double-check if 3PL complies with industry standards for freight shipping. Also, research what their security and liability policies are to ensure your products are in good hands.

6. How can this 3PL help my business scale up? One of your primary goals as a business should be to grow in a healthy direction. Analyze everything you’ve learned about this 3PL and determine if they will be capable of adapting to your business’s evolving needs and seasonal fluctuations.

7. Will this 3PL deliver quality performance? In the end, the most important aspect of outsourcing a 3PL is if they will do an excellent job. If you are convinced a 3PL is meeting all of your standards, then they may be the right 3PL provider for your business.

Keep in mind that you don’t have to rely on just one 3PL. It’s perfectly acceptable to contract with multiple 3PL providers to meet your needs. For instance, one 3PL may offer all the logistics services you’re looking for but have limited warehousing capabilities. You could then partner with a second 3PL that specializes in warehousing and storage. You can also specify in the contract with the first 3PL that they must pick up products from the second 3PL’s facilities for delivery.