Third Party Logistics and What it Could Mean for your Business

Many a business, especially those in retail, which requires movement of goods, will require some form of supply chain management. Third party logistics involved outsourcing the likes of distribution, warehousing and other fulfilment services to a service provider who has the capacity.

As a business owner, you need not worry about factors such as warehousing your goods and have the assets to transport your goods from the factory to the warehouse or from the warehouse to the retail shops or final consumer stage. Whilst there is a cost involved, opting for third party logistics costs a fraction what would it would cost should you carry our these services on your own.

Also referred to as 3PL, third party logistics will undertake the operational logistics of your business from factory to warehouse and warehouse to final delivery transportation. Third party logistics service providers will offer a variety of services, including freight forwarding and order fulfillment.  The 3PL services provided could be scaled and customized based on the business requirement at hand.

There are many benefits to using a third party logistics provider instead of going out on it on your own. By assigning a third party who is proficient in the area and understands the dynamics of the services, then you are able to look into other aspects of your business without having to worry about the functionalities involved in the supply chain operations. Benefits of employing a third party logistics provider are as follows.

  • Cost Reduction – With the experience and ability to leverage with freight companies, 3PLs are able to provide you with price negotiations. Transco Cargo as a freight forwarder and third party logistics provider is able to get you the best rates.
  • Scaling based on Requirement – As your business grows and the progress, you can scale your business with the demand without having to commit capital towards it.
  • Customer Service Experience – with expectations from customers for almost instant gratification working with a 3PL will help in fast tracking shipments.
  • Testing our New Markets –
  • Risk Mitigation – 3PLs are also responsible for coming up with alternative options should a delays occur and arrange for the same.
  • Gaining Expertise – if you’re a startup, choosing a 3PL is the best way to gain knowledge of how supply chains will work for your type of business as they would have had experience from dealing with similar clientele.
  • Understanding International Logistics – international third party logistics providers are able to better understand the documentation and processes involved in dealing with specific countries, as well as customs proceedings and other border related concerns that be relevant to your business. By opting for a professional international 3PL, you will be saving time and money.
  • Cost Savings – Warehouse maintenance can be expensive. With a third party logistics provider, the overhead of inventory holding is cut down. Certain 3PLs also provide inventory forecasting, informing you when it is time to restock your goods.