Third-party logistics is a booming business. With an ever-increasing demand for products, inventory, supply chain, and transportation are the areas that need constant focus. While manufacturing the products and keeping up with the demands is important, delivering them to the customers on time is also equally important.
Enterprises, big and small, are finding it hard to manage everything at once. This led to many of them opting for third-party services. Outsourcing has increased. This led to increased opportunities for more 3pl companies to explore the market and offer warehousing and logistics services.
Considering the current trends, we can safely say that the demand for 3pl logistics will only increase in the future. Enterprises are able to save time, effort, and money by outsourcing the supply chain management to third-party companies.
But as with every other market, not all 3rd party companies are suitable for the kind of services an enterprise is looking for. While some companies offer everything from warehousing to cross-docking and transportation, other companies offer only limited services. Also, the size of the warehouse, the type of transportation, etc. should be considered before finalizing a 3rd party company.
So how can enterprises identify the best 3pl logistic companies? How do the top largest 3rd party logistics companies work and deliver results? What are the types of logistics companies we see in the market? Let’s take a look.
What Sets the Best Apart?
Following the Schedule
On time deliveries are vital. A small delay can cause a huge amount of loss for enterprises. Be it in terms of damaged products, paying additional charges, or customer dissatisfaction. If the shipments were to be transported through air or water, they have to reach the center well in advance. Enterprises have to choose a 3rd party logistics company that has the best success rate in delivering the shipments on time.
Network and Connections
When a 3pl logistics company has a wide network and numerous connections, these can be utilized by the enterprises to explore new markets and reach out to a different set of audiences. A company with more connections is better equipped to deal with last-minute changes in the plan, that too without making changes to the schedule.
Technology and Employees
Warehouse management software makes it easy for both the 3pl company and the enterprise to manage and track the products. Similarly, capable and qualified employees can work effectively in weighing, packaging, moving, and transporting the products. A 3rd party logistics company that has both the latest technology and efficient employees will naturally offer quality services.
Providing the standard services is no longer enough in this market. For a company to be the best it has to offer additional services and benefits that will help enterprises further increase their speed of deliveries or cut down the cost of investment in supply chain management.
Working of a 3rd Party Logistics Company
A 3pl company receives inventory from enterprises and stores it in the warehouse (with the required temperature control). When the enterprise sends an invoice to move some or all of the products, the company takes care of inspection and packaging before transporting them to the dock. The goods are then moved to other containers or freight trucks to deliver them at the required destinations. Transportation can be multimodal as well.
Types of 3pl Logistics Companies
1. Production Logistics: This deals with supplying the required raw materials required to manufacture and produce goods. When the raw materials reach the manufacturing unit as per the schedule, the production process will not be delayed.
2. Supply Logistics: Supply logistics are known as shipping companies that deliver the finished goods from the enterprise to the distributors or retailers and even directly to the customers. They play a major role in deciding the success of the enterprise.
3. Distribution Logistics: Also known as warehouse logistics, the goods from the manufacturing unit are moved to the warehouse and stocked until they have to be packed and shipped to further destinations.
4. Reverse Logistics: Reverse logistics is the process in which the disposed products are collected and useful components are sourced from them. These components are again used in manufacturing other products.
The top largest 3rd party logistics companies tend to offer more than one type of logistics services so that enterprises can outsource the entire process to a single company. This also makes it easy for the enterprise and the 3pl company to work in tandem and improve the speed of the business operations.
When the 3pl logistics company helps enterprises become successful, it will invariably increase the success of the company. A successful 3pl company can increase its network and further help businesses. It is win-win satiation for all the parties involved.