Top 4 Ways 3PLs Save Money on Shipping

Each day, thousands of shippers depend on support from experienced third party logistics companies to help them manage their supply chain operations. From simple freight bill auditing to complete supply chain solutions, 3PL’s are increasingly providing value to shippers from manufacturing companies to retailers of brick-and-mortar and e-Commerce platforms. While most shippers understand the value of 3PL companies – they may not be too familiar with their cost savings capability.

Are you a shipper looking for ways to save money on shipping? Here are 4 unique ways 3PLs can reduce your expenses, improve profitability, and increase bottom-line profit.

How Shippers Save Money on Shipping

There is a saying in business that volume cures all. We all understand the role that volume sales have on pricing. Whether it’s shopping at Costco or setting up multiple shipments from the same carrier, volume in the supply chain definitely can save a company money. Just imagine the cost-savings associated with thousands of individual shipments on a daily basis. This is the buying power of an experienced and professional 3PL.

Third-party logistics companies work with hundreds of companies just like yours – each of them with parcel, LTL, FTL, and international shipping requirements. The 3PL company of today establishes strong relationships with carriers ranging from parcel to LTL. They are provided with exceptional rates by these carriers and pass the savings along to their clients. When you are paying less per shipment – your company will save money on shipping with each load.

Reduced Payroll

When most shippers review their monthly P & L statements, especially their logistics and shipping departments, a major monthly expense is payroll. From paying shipping and receiving employees, to those in accounts payable and shipping customer service, the average shipper spends a tremendous amount of money on paying people to operate their logistics programs. However, when you turn to a 3PL professional, the cost is a fraction of the amount of payroll.

Plus, when a 3PL manages your logistics duties, it permits you to allocate your employees to other pressing areas – such as improving customer service, introducing new sales opportunities or other focus areas.

Better Controls on Freight Invoice Auditing

Most shippers understand the reality that mistakes on a freight invoice can cost their money a tremendous amount of money. This is a major reason why large volume shippers trust a 3PL to manage their freight bill audit and pay solutions. It is estimated that the average company spends $11.00 on payroll alone to audit a single freight invoice. An experienced 3PL can accomplish this task – and at better efficiency for a fraction of this cost. And unfortunately, many hidden errors are missed. This is simply because the employee completing the audit isn’t familiar with the in’s and out’s of the logistics industry.

A 3PL, on the other hand, are experts in freight auditing. They find errors that most seasoned accounting specialists miss. This is usually due to the fact that they don’t know what and where to look. They know how to audit, but they also utilize advanced software solutions to help them.

Improved Efficiency of Supply Chain Communication

A leading cost that most shippers hate paying are missed deliveries or delivery reattempts. While this cost is often linked to using inefficient carriers, there is another leading source of excessive delivery charges. The cause of this is usually a result of lapses in communication. 3PL’s utilize advanced cloud-based TMS and CRM systems that can provide real-time updates to potential delivery recipients on the status of their shipments. This permits the carrier to send updates on traffic, weather, or other service disruptions that will impact the expected delivery of products – from parcels, overnight packages, LTL or FTL shipments.

Not only does this improve delivery efficiency and save money on shipping, but it also helps to improve customer service. When your customers are pleased that you went the extra effort to communicate with them, they are more likely to continue working with you. And who couldn't use more business?

Final Thoughts

Partnering with the right 3PL can free up your time and resources. With all this extra time, shippers can focus on other important aspects of their business. It not only helps you to save money, but also helps improve your complete supply chain operations.