Third-party logistics providers typically specialize in the integration of warehousing and transportation services that can be scaled and customized to customers’ needs based on market conditions and demand.
These companies are becoming an important part of today’s supply chain, offering services that include inbound freight, freight consolidation, distribution, order fulfillment, and outbound freight.
When a firm decides whether or not to use such a service, it needs to weigh that option against some of the logistical headaches and costs of taking on those responsibilities. Here are some of the advantages of assigning that work to companies that specialize in this type of business.
One of the primary reasons for companies to use the services of 3PLs is to save money. A good 3PL will present you with a no obligation cost comparison to help compare their programs against the competition.
However, it is always smart to make sure the cost estimates are based on the rates of carriers that are reputable and maintain a solid reputation for on-time delivery and customer service.
3PLs will also audit freight bills to ensure accuracy. The 3PL freight partner will typically use its resources and expertise to audit every invoice for correct class and discount amounts, before adding them to the invoice that goes to the customer.
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3PL companies began to grow back in the 1980s when businesses needed to look for new ways to outsource logistical functions so they could concentrate on their core business.
The company’s overnight delivery service changed the way in which business-to-business and business-to-customer transactions were handled. This opened up the opportunity of using just-in-time techniques, which saved warehousing space and reduced overall costs.
The introduction of efficient-consumer-response (ECR) techniques led to smaller and more efficient shipment sizes, which in turn improved overall efficiency.
Selecting a good 3PL firm
When selecting a 3PL, the request for information (RFI) should be as detailed as possible. When the bids are received, a company needs to evaluate each one based on criteria that should include some of the following:
— Does the 3PL provide the services required? — Does the 3PL have the technology required to perform the tasks required? — Does the company have the required warehouse space, dock capacity, warehouse personnel, etc.? — Is the 3PL financially sound? — Are the 3PL’s geographical locations suitable to cover the network? — Does the 3PL have the flexibility to respond to changes? — Are the 3PL’s environmental policies compatible? — Are the costs of the services detailed enough for comparison to other bids? — Are the customer references acceptable? — Is the 3PL a good cultural fit?
3PL Central is one of those companies that addresses all the above concerns. Available via phone and in-person, 3PL Central support ensures you are up and running quickly. Their assigned teams are constantly available if you have any last-minute needs, and their basic support is always free.
With fees less than $500 per warehouse per month, their “3PL Warehouse Manager” is priced right to support small-to-mid-sized warehouse operations. And with no long-term contracts, their business bills your firm the same way you bill your customers: monthly.