Third-party logistics (3PL) service providers can offer shipping, storage, and supply chain logistics support to streamline your operations, reach your goals, and save on costs. Learn about what 3PL entails, the benefits that outsourcing logistics management offers your business, and how to select the right 3PL partner for you.
What Is 3PL?
3PL companies manage the logistics of your supply chain so that you don’t have to. Their services typically include freight packing, shipment transportation, and storage, as well as options like brokering, consolidation, supply chain logistics, and more. 3PL companies have varying business models, though most are not asset-based, meaning that they have a network of vendor and carrier partnerships to arrange these services and necessary 3PL warehouses, distribution centers, equipment, and labor on your behalf.
When working with a 3PL service provider, you can expect costs related to:
- Inventory receipt
- Picking and packing
- Storage and warehousing
- Outbound shipping
Pricing will depend on individual factors like order volume, transportation distance, and any required specialty services like refrigeration in shipment or storage.
Benefits of 3PL
The external support of 3PL service providers offers your business and customers numerous advantages while keeping a competitive edge. Using 3PL providers gives you:
- Access to experience and resources. Among the greatest of 3PL benefits is the ability to capitalize on the experience and resources of the provider and their network. They’re already familiar with the various documentation and regulatory compliances associated with transport, imports and exports, and more. Also, they already have the staff, equipment, vehicles, and warehousing resources to take on your job.
- Budgetary savings. In addition to saving on your initial investment given the 3PL provider’s existing resources, having vendor partnerships helps in negotiating optimal pricing. Also, given the high volume these companies handle, they’re often able to pass those volume discounts on to you.
- Operational flexibility to scale your business and expand your market. 3PL service companies offer you the flexibility to scale operations based on your current and future business needs and order volumes. Also, those that cover a wide service area already have facilities and warehouses ready should you want to expand into new markets, and you save time on learning a market’s nuances.
- Ability to concentrate on your company’s core competencies. Outsourcing supply chain logistics to an experienced third party allows you to focus on the core of your business and what you do best, letting a 3PL provider manage shipping, storage, and logistical concerns.
- Enhanced customer service and satisfaction. Partnering with a 3PL company leads to improved services and order turn times, which, in turn, have customers associating your brand name with reliability.
How to Select the Right 3PL Provider
Your 3PL partner will have a tremendous impact on your company’s supply chain, costs, and customer service. If you’re asking yourself how to choose a 3PL provider, important factors to consider include:
- Provider capabilities. The 3PL provider should offer the services you need now, and potentially in the future. Particularly consider any specialty services, like refrigerated or frozen storage and transportation, less-than-truckload (LTL) consolidation, truck repair, etc. The logistics company should also be aware of and adhere to all industry safety regulations.
- Pricing. In addition to having the services you need, make sure the 3PL company fits within your budget.
- Reputation and experience. There are numerous ways to determine if a company is reputable. In addition to years of service, certifications, company mission statements, and online reviews, look for assurance metrics like on-time, in-full (OTIF) order fulfillment rates.
- Service availability. It’s important that the 3PL company provides storage and transportation within your needed service area and timeframe.
- Order tracking. Visibility and accountability are important, so the provider should offer the ability to track shipments during all order fulfillment stages.
- Responsiveness and customer support. Customer service is at the core of a good business. Choose a provider who can identify issues before they happen for optimal logistics management and provide sufficient support to handle problems when they arise.
- Scalability. One of the benefits of partnering with a reputable 3PL service is that they have the staff, equipment, and expertise to quickly adjust your logistical plan and manage any changes in volume or market. Partner with a 3PL provider that not only meets your current needs, but offers any services you may require as your business grows.
- Technological advancements and security. Your provider should have the technology in place to process, streamline, and track an order from its placement to final delivery. Also, they should be able to adequately protect your company’s financial information.
- Customized solutions. A one-size-fits-all solution isn’t the best fit for any business. Your fulfillment partner should be able to provide a supply chain plan tailored to your unique product and needs.
Why Mulder Brothers Is the Right Choice
Mulder Brothers Brokerage specializes in refrigerated and frozen transportation and warehousing, cross-docking, redelivery, and cold chain 3PL. Our extensive trucking background and success in multi-vendor and LTL consolidation services set us apart from the competition, as does our participation in the Walmart Consolidation Pool Program as an approved Walmart consolidation partner. We maintain strategic relationships with a network of trusted carriers and vendors that, along with our consolidation facility, allow us to serve clients nationwide. Contact us today to learn more.