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3 Benefits of Working with 3rd Party Logistics Companies

This is part two in a two-part series. You can read part one here.

In part one of this two-part series, we discussed what a 3rd party logistics (3PL) company does every day, but we didn’t really apply that to a business setting in any direct way. That’s what part two of this series is about—putting that information to good use so you can make the best decision when it comes to partnering with a 3PL in the future.

Making a connection with a 3PL can seem like a nebulous agreement. After all, you’re probably not really sure how they can help your business, you’re just told over and over that they can. If your eCommerce business needs order fulfillment services and you’ve been told a 3PL can help, it’s probably true.

But you shouldn’t jump into a relationship like this blind, instead let’s look at three benefits of working with a 3PL company:

Increased delivery speeds. Everything about a 3PL centers around making your deliveries go faster and faster and faster.

From the time it takes for deliveries to be routed to the warehouse, to the time it takes for pickers to find the items in the holding area, to how long it takes for them to go in the box and even how long they spend in a truck headed to their destination, your items are timed, each movement is tracked and your 3PL is always looking for places it can improve.

With the help of specially designed technology like arm-mounted computers, finger-mounted bar code scanners and even heads up displays made possible by Google Glass, every second that can be cut is cut as processes are constantly refined. Your 3PL can provide you with remarkable amounts of data about how long your products spend on the packing floor or the size of the box that they’re typically packed into if you ask them.

Flexible supply chains. When you do your own inventory stocking, you go to the warehouse and you move the inventory to where it goes. Sometimes that means you have a lot of inventory kind of split up and in a lot of places in case someone orders from your eCommerce shop versus your retail location and so forth.

A 3PL doesn’t have this problem. In fact, these companies have developed ultra-flexible supply chains that can move inventory on the double. Instead of keeping stocks here and stocks there, everything comes out of one warehouse and goes where it needs to go, whether that’s into your store or into your customers’ homes. Flexibility in the supply chain simplifies a lot of your inventory management and logistical problems.

Access to EDI ordering systems. If your business happens to sell products direct to other businesses, having access to an electronic data interchange (EDI) system can increase your market and the number of orders you receive. When businesses order products in bulk, it’s often easier to use EDI to push their orders through to eliminate the hassle of shopping carts and any errors that might be involved with the potential human element on your end.

With an EDI system, most of the order process is completely automated, giving businesses a more secure feeling. Setting up your own EDI system can be costly, but partnering with a 3PL that has an EDI system available to use will quickly expand your business reach without your having to invest any more capital.

There are many more benefits to working with a 3rd party logistics company, these are just three of the most common for small to medium sized businesses. If you’re still doing your own order fulfillment and distribution, there’s no better time than now to find out what a 3PL is all about and what they can do for your business.

October 11, 2016
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