Availing of 3PL Services Can Draw Great Benefits – Know-how
“90 percent of the Fortune 500 companies use Third-Party Logistics and supply chain services” – this news published by Armstrong and Associates Inc. back in 2017 took the industry by a storm.
The Global third-party logistics (3PL) market was valued at around $ 1 trillion in the year 2020 and it is expected to reach $1.75 trillion by 2026. This speaks volumes about the significance of the supply chain industry and its indispensable role in today’s ‘fast track delivery era’. It is alright to believe that the supply chain industry is here to stay owing to the massive expansion of our e-commerce industry.
The movement of commodities, whether raw materials, semi-finished goods, or finished items, is unavoidable in every business. As a result, it is safe to claim that most company models must have a supply chain strategy.
3PL is a service provider who is believed to be the maestro at planning everything around supply chain operations.
Before we look at the advantages of having a 3PL partner let us comprehend what a 3PL is.
What is a 3PL (third-party logistics)?
Every firm has a specialty and staying focused on developing it is critical. The best outcomes may be obtained when the expertise or specialty is used to produce the best results. A manufacturing behemoth, for example, may find it challenging to manage its supply chain management role. This is where the services of a 3PL come in handy.
In layman’s terms, 3PL is a partner or a service provider aiding businesses of any field in managing their supply chain-related activities. It is a service provider managing a few or all activities related to your supply chain functionalities. They are a culmination/host of one or more services ranging from warehousing, inventory management, shipping coordination, distribution, and returns.
Why do companies opt for 3PL services?
The reason for opting for 3PL services could vary from business to business. Some may use it to venture into a new market, others to create a positive customer experience and so on.
Here are a few common reasons why companies opt to partner with the 3PL service provider:
1. Taking advantage of someone else’s expertise and experience
In this dynamic and unpredictable global market, it is tuff to have a team of in-house experts for all functions. Having such a team means a greater cost which not all businesses can survive.
It is, therefore, easier to take the advice of an expert when it comes to your supply chain management function. A 3PL service provider is well versed with the domestic transport channels, import export-related documentation, international regulations, and so on. Their expertise and experience can change the landscape of your supply chain function.
2. Cost saving
The primary job of a 3PL service provider is to successfully manage the supply chain function of as many businesses as possible. As their business footprint manifolds so do their bargaining power with different stakeholders involved in the supply chain.
Their deeper connections within the logistics sector can give him a better advantage during negotiations. This can lead to a reduced overhead cost for your business.
3. Mitigation of risk
Shipping delays can happen for a number of unfathomable reasons. Frequent delays can pose a greater risk for your business as it directly affects the trust in your brand.
Engaging a 3PL service provider can mitigate such risks. It is the responsibility of the service provider to manage and arrange an alternate route for delivery. This takes the burden off your head and shifts the sole responsibility to the service provider. In many cases, you can also get protection against goods damaged or lost, given the terms of your engagement.
4. Greater Customer Satisfaction
The goods are delivered to the customer in a time-bound manner. Anything that can go wrong, between the gate of your factory to the door of your customer, is the ultimate responsibility of your 3PL partner. So, they are more agile in ensuring customer satisfaction.
Also, all of the above steps create greater brand reliability for your business fetching stupendous prosperity in the long run.
At ALG, we strive to give only the finest level of service to all our customers and carriers. We provide a variety of shipments to meet your company’s demands, as well as while providing straightforward and immediate answers to all of your freight shipping operations. To learn more, please visit https://alg.us.com/, phone +716-337-5000 / 516-874-0909, or email info@alg.us.com / accounting@alg.us.com
