Getting goods from point A to point B may seem like it should be a simple process. In today's world, though, logistics is a complex industry. That's why third-person logistics companies, or 3PLs, are so important.
What Are 3PLs?
3PLs are companies that focus on logistics, transportation, and fulfillment. Every company is a little different but most offer a range of solutions. EASE offers managed logistics services that include everything from storage and transportation to shipping, supply chain management, access to information technology, and more, for example. Similarly, some companies offer their services only domestically, while others are happy to help international clients.
The Typical Process Used By 3PLs
The details of how orders are handled will differ between companies. However, most 3PLs follow the same general processes in managing orders. The fulfillment process usually involves these steps:
- Receiving
- Order placement
- Item collection
- Packaging
- Labeling
- Delivery
- Tracking
In some cases, the 3PL will work with partners to provide more affordable services. In others, the same company will manage 100% of the fulfillment process.
How 3PLs Save Companies Money
There are several ways in which partnering with a good 3PL can save a company money and make it easier to meet financial goals. The top money-saving benefits of outsourcing logistics include:
Consolidated Shipments
Whether a 3PL has its network of delivery vehicles or relies on external partners, the fact that the company works with multiple clients can help all of them save money. The 3PL can pool orders together to get more favorable rates, explore different methods of transportation, and pass the resulting savings on to clients.
Reduced Labor Costs
The cost of labor associated with order fulfillment can be quite high. Working with an experienced 3PL can keep them low since these companies utilize the most efficient possible processes, automating workflows whenever possible and providing incentives to workers to avoid expensive employee turnover.
Improved Inventory Management
Inventory management is one of the most essential tasks associated with retail sales, but it's also one of the most difficult. Partnering with a 3PL offers even small businesses access to the tools and technology required for accurate inventory management, making it easier to forecast demand.
Kitting and Assembly
Companies often bundle products together in a process referred to as kitting so that they are ready to ship as single items. The process of readying the items within a kit for shipment is known within the industry as assembly, and it can improve fulfillment efficiency. Most 3PLs include kitting and assembly services, allowing them to help customers save money by printing labels in advance and avoiding the need for individually weighing every item.
On-Time Deliveries
Today's customers expect their orders to be fulfilled within a matter of days, not weeks. This can create problems for smaller companies that don't have the infrastructure to guarantee quick turnarounds. A 3PL partner will fulfill orders at faster speeds, keeping customers happy and improving the brand's reputation.
Find a Qualified Logistics Partner
Companies searching for the perfect 3PL should take note of the company's history and reputation. Clients should look for a partner that has experience working with others in the same or similar industries to ensure that all of the tools and techniques used to get items from point A to point B are optimized for their needs. A qualified logistics partner will be able to form a plan for how to help clients meet their long-term financial goals in addition to saving them money on each order.
