How Does a 3PL Benefit the Supply Chain?

Your company may be looking to extend its client base, maximize revenue while minimizing overhead costs, streamline services in regards to shipping and storing products, or navigate the process of getting goods into customer’s hands in the international market. These tasks are all of vital importance, but attempting to tackle any of these without the knowledge and expertise required is not only challenging, but any mistakes could also prove incredibly costly.

This is where a third-party logistics (3PL) company, comes in.

When companies choose to work with a 3PL organization, they are engaging in a partnership that will grant them access to a whole suite of logistics management and services, allowing them to focus their attention on their own core goals and production. 3PL companies are experts in supply chain logistics, and they use their connections and expertise to make the processes run smoothly and efficiently.

3PLs, like Redwood, can provide a variety of services, depending on company needs; from simple warehouse space and transport to bundles of services across the entire supply chain. Want to know how partnering with Redwood Logistics can benefit your supply chain? Contact our team today.

Transportation Management

Third-party logistics companies typically serve three major functions for their partners. The first of these is transportation. 3PL companies are able to engage carriers or work with private fleets to manage the transportation of freight on behalf of a company and use their specialized knowledge and experience to save costs and maximize flexibility.

Consolidation of LCL (less than container load) and LTL (less than truckload) freight, monitoring freight in real-time, and managing freight insurance documents and payments can ensure lower transportation costs and better efficiency.

This is by far the largest 3PL benefit that all supply chains strive to achieve.

Global Shipping

In dealing with global shipping, there are a wide variety of complexities that can make even the most organized business owner’s head spin. There are many international shipping protocols to consider. Ensuring trade compliance requirements are met, keeping track of varied shipping regulations, navigating customs, duties, import and export costs, freight forwarding and consolidation- all of these are expertly managed in the hands of a 3PL. Third-party logistics companies oversee these tasks and attend to their execution as planned.

Information Technology

Logistics are complex for a wide variety of reasons, so technology is often employed to track the various aspects of the supply chain. Managing e-commerce, building and maintaining customer relationships, overseeing transportation, warehouse operations, and procedures, inventory information and tracking, and monitoring shipments in transit all require specialized technology programs. 3PLs have and utilize a variety of systems to make supply chain processes more visible and easily managed. Increased visibility means errors are frequently caught and avoided before they become costly mistakes. 

Overall 3PL Benefit

Partnering with a 3PL comes a wide variety of benefits.

Chief among these benefits is access to the expertise needed to navigate the complexities associated with even the most basic elements of logistics. 3PL companies make it their business to know and have experience in the challenges of warehousing, shipping, fulfillment, and inventory management. That same expertise means streamlined and professional processes and avoiding pitfalls that can happen when dealing with more complicated tasks, like international shipping issues.

A partnership with a 3PL also means eliminating the need to invest in warehouse space. Finding and managing a warehouse space is a huge cost. What if you are a company that is not yet doing the kind of volume that warrants making that investment? There are also market and industry fluctuations, and seasonal periods to consider. 3PLs allow your company to scale operations and achieve better flexibility and responsiveness to the market. This is a 3PL benefit that is absolutely invaluable to any company looking to scale operations.

With a third-party logistics company handling your supply chain processes, there is also a cost savings on technology, transportation, and the employees needed to carry out those processes. Full-service 3PLs additionally help clients to optimize inventory levels and save on holding costs through the use of industry forecasting, and can advise on and manage packaging, mailing lists, and returns processes.

These cost-saving benefits alone make using a 3PL a clear advantage.

By choosing to leave the complicated processes of logistics in the hands of logistics professionals, business owners can be assured that they are getting the most out of their time and money. 3PLs analyze and monitor supply chain procedures to eliminate issues, make continuous improvements, and stay responsive. This leaves their clients free to concentrate on the aspects of their business where their attention will benefit their company most while being confident that their inventory levels, shipments, fulfillment, transportation, warehouse processes, tracking technology, labor, and warehouse space are both scaled to their current needs and expertly managed.

Reach out to the Redwood team today and let us show you why partnering with us is the best decision you will make this year.