Third-Party Logistics (3PL) Solutions

Everything You Need to Know About Third-Party Logistics (3PL) Solutions

Is it time to call in 3PL solutions to improve your shipping and distribution?

Third-Party Logistics service providers are shipping experts who exist to help improve logistics for companies of all sizes. While typically seen as a solution for medium-to-large-sized businesses, 3PLs are also gaining popularity among smaller companies that see themselves frequently shipping cross-country.

3PL services are typically customized for each shipper, with a variety of services and shipping strategies that may be deployed depending on context. This flexibility is what makes 3PLs so valuable – they have access to numerous shipping options and strategies and can build a logistics pipeline that best fits your needs.

So, in this article, we’ll take a look at everything that 3PL solutions could do for you.

I. Streamlined Shipping

The primary focus of a 3PL is on improving your shipments: decreasing costs, improving efficiency, and improving reliability as well. Because a 3PL typically has a wide range of contacts and shipping options available, this can be built around your needs. For example:

Less-than-load (LTL) shipments are one of the most basic freight consolidation options. These combine shipments from two or more companies which are all going to a nearby location, allowing one full truck to do the work of 2-3 half-filled trucks. This results in considerable cost-savings for every shipper involved.

Intermodal shipping means making use of every available shipping option to optimize for specific outcomes. For example, perhaps sending your shipment by rail – or even cargo ship – would be cheaper than going the whole way in a truck. 3PLs have the contacts necessary to set up a journey that goes through multiple modes of travel.

Expedited freight focuses on time. Using typical parcel-style services, products tend to reach customers in large metro areas faster than other areas in the country. This can result in end customers who feel left out, or neglected if their shipments take twice as long as someone else’s. Expedited freight services cost a bit more but can help equalize shipment times.

Or, for a higher cost, you could even deploy dedicated direct-to-store (DTS) solutions to ensure your products arrive at retail locations no matter what.

II. Robust Distribution

What if you’re a larger producer delivering to numerous destinations around the country? In this case, you need a 3PL which also handles load consolidation and distribution.

One example of how this can work is called retail pool distribution. Say you’re delivering products to a large shopping mall with numerous independent stores. Sure, you could hire an exclusive delivery, but this is inefficient from the point of view of the mall’s shipments overall since every shop and shipper uses their own trucks.

Retail pool distribution solves this problem. The 3PL takes on several different shipments, from different producers, all intended for delivery in the same geographical area. These then go to a warehouse under the 3PL’s control, where the shipments are sorted and put onto the minimum necessary LTL trucks to handle all deliveries at once. Again, everyone involved benefits from lower shipping/receiving costs.

III. Warehouse Management

Another common service from 3PL solutions providers is warehouse management. Warehouses require specific expertise to optimize, which many companies lack internally. A 3PL, on the other hand, specializes in such matters!

They can take over direct management of the warehouse, as well as implement improved package picking and tracking with modern computerized solutions. This is true for both incoming and outgoing shipments. A 3PL could just as easily optimize the warehouse of a manufacturing center which needs to keep track of incoming shipments from dozens of different component producers.

Larger 3PLs may even have access to a wide network of regional warehouses – used for their pool distribution services – which can also be utilized for your shipments as needed.

IV. All-Around Customer Service

For shippers, 3PLs offer a service advantage by becoming a single point of contact for your shipping needs. Since they’re handling coordination, they free you from the burden of keeping track of multiple shipments across multiple vendors. This reduces your administrative costs.

In addition, their tracking services can also be put into a web portal that your own customers can access. They’ll have access to the same parcel-tracking system you do, allowing them to self-serve many of their “Where is my shipment?” style questions. This, too, reduces administrative overhead and also typically results in greater customer satisfaction.

V. Reverse Logistics

Too many companies overlook the cost burdens associated with reverse logistics – that is when a product needs to be sent back to its source, such as a damaged product being returned for repair or replacement. 3PLs can handle this as well, leveraging their improved shipping techniques to speed up the return of the product.

Given that such post-sale support always cuts into profits, it’s vital that reverse logistics costs be kept as low as possible while still providing adequate customer service. 3PLs can significantly reduce these costs and prevent returns from putting you in the red.

Do You Need 4PL Services?

For the largest of companies, there’s another option: 4PL solutions. 4PL providers go beyond warehouse management and shipment optimization to take over full control of your shipping system. In effect, it means outsourcing everything involving shipments, both incoming and outgoing.

Not all businesses need this level of personal care, but it can be incredibly useful in situations where a company’s existing shipping infrastructure would need to be entirely overhauled to see greater efficiency. The cost of hiring a 4PL would be much less than, for example, building an extensive network of self-owned warehouses around the country.

US Logistics Solutions Optimizes Your Logistics!

We have decades of experience helping companies of all sizes improve their logistical efficiency, reducing costs, and improving customer satisfaction. If you know that you’re spending too much on shipping, or if your operations have grown to the point that you feel your current shipping solutions are inefficient, contact us to discuss your options!


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