In today’s up and down economy every shipper is looking to find strategic advantages over their competition.
The biggest hurdle companies continue to face is how to get products to their customers in the most cost effective, reliable, and quickest way. While transportation management cost reduction remains the main reason why we look to Third Party Logistics or Truck Fleet Management providers , that reasons has expanded considerably during the past several years in today’s ever changing economy.
According to shippers, the following are some of the challenge’s shippers face in getting their products to customers.
- Cutting Transportation Costs
- Business Process Improvement
- Improving Customer Service
- Supply Chain Visibility
- Managing Inventory
- Finding, Retaining, Training Qualified Labor
- Reducing Labor Costs
- Expanding/Selling to New Markets
- Regulations, Security, other Compliance Issues
- Expanding/Sourcing to New Markets
- Vendor Management
- Technology Strategy and Implementation
Traditional BENEFITS Of outsourcing logistics
Volume Discounts. The most significant reason to outsourcing logistics to a transportation management provider is to receive volume discounts. Transportation providers receive greater discounts when purchases things like trucks and related services. They also receive much deeper discounts with couriers and freight forwarders when needed.
Information Technology. Logistics IT is evolving rapidly and becoming increasingly sophisticated. By outsourcing logistics to a transportation management company, companies don’t have to invest their own capital towards IT like a Transportation Management System (TMS) to improve services to their customers.
Infrastructure. Selecting a transportation management provider that has made significant investments in Trucks and Infrastructure is critical to ensure their capabilities can handle your volume especially during peak times.
Management Team. Take the time to ensure your transpiration management provider core competency is logistics. An effective logistics team has expert knowledge in Transportation management and will provide a wealth of insight in improving your effectiveness.
Mitigating Risk: Outsourcing transfers the risk of transportation operations to the logistics provider thus protecting your organization from fines, penalties, lost shipments and damaged goods.
Fleet Management: Weather you would like 3PL providers to manage your fleet or use their fleet of trucks, they have the operational and financial capabilities to help you achieve your route delivery objectives as well as address all the issues in maintaining a fleet of trucks in top working condition.
DELIVERING MORE THAN JUST MEAT AND POTATOES LOGISTICS
Traditionally shippers not only wanted cost effective supply chain management solutions, but also the flexibility in the execution of their logistics as well. Whether it was infrastructure or technology, many companies were cautious in dumping capital into fixed cost. The smarter option was to leverage 3PL providers to assume the risk as well as provide scalable solutions that addressed changing market conditions.
The greater transformation in today’s 3PL landscape is that shippers are beginning to lean on logistics service providers to deliver more than just meat-and-potatoes capabilities fixed on tactical cost reduction. Today, the direction of 3PL outsourcing partnerships are moving toward an enduring long-term strategy where shippers are beginning to depend on 3PL providers to become an extension of their enterprise with strategic oversight to bring about process change.