The Role of Third Party Logistics in the Supply Chain

What Role Does Third Party Logistics Play in the Supply Chain?

Supply chain management is all-encompassing, it isn’t just about the transportation, procurement, or storage of goods. It actually covers the entirety of the operation. Everything from manufacturing right down to the last-mile delivery falls well within the domain of supply chain management. A well-rounded third party logistics company knows how to adapt to these changes quickly and efficiently.

Needless to say, the fulfillment of these operations are always being improved upon and new ways of working implemented. And a well-rounded third party logistics company knows how to adapt to these changes quickly and efficiently.

To give you an example of the sort of work that most 3PL providers handle, let’s say we have a shipping company that needs some logistics help.

The shipper wants to start exporting their goods overseas. But they have one major hurdle to jump; they’ve never shipped internationally before.

So, to make the process go a bit more smoothly, they hire an experienced third party logistics company to help them get their goods shipped.

The 3PL company searches for the best rates, most reliable carriers, and gets all the paperwork started. Once the goods are ready for shipment, the 3PL picks up the international order, books the carrier, and delivers the cargo to the nearest port. Finally, they make sure that it clears customs as it travels across borders to be received by your customer on the other side.

Literally, every part of the shipping process is taken care of by one single party; a third party logistics company.

Minimized Risk

Think about all the time it takes to procure or manufacture your goods, get them packaged and finally sent out to your customers. It takes a while, right?

Okay, now think about taking all that time only to have the package arrive damaged, not on time, or not at all.

Finding a solid 3PL backed by an equally reliable network is a great way to prevent this from happening. Generally, third party logistics companies will ship your goods as FTL or FCL. This is good news for you because it means that your shipment is being transported by itself. The carrier does not have to make numerous stops, nor do they need to move your goods around to load or unload products from other shippers.

All in all, this method of transport saves time, money, and peace of mind.

Third Party Logistics Reports

One of the best resources to have available in the shipping industry is that of reporting tools.

It is through the use of reports that shippers ensure their customers are happy and there is no disruption in the flow of goods through the supply chain. It is equally important that shippers have the ability to monitor the 3PLs that they choose to with and represent their brand.

And to be fair, most third party logistics providers make these reports available to their clients on a regular basis. Well, at least the more reputable 3PLs do.

These 3PL reports usually contain data regarding the speed of your deliveries, accuracy of inventory lists, and order accuracy. Some reports contain many other key data points that are useful in helping a supply chain improve and scale.

After all, that is why you hired a third party logistics provider, right?

Focus on What is Important

Working with a third party logistics provider affords shippers the time to focus on what is important; growing a business.

A 3PL is there to handle all of the heavy-weight logistics stuff for you. They will take care of making sure that those orders get picked, packed, and fulfilled. Inventory forecasting? Leave that up to them.

You have a business to run and tons of useful data flying at you from your 3PL and their efforts. In order to do anything useful with either of those things, you need time, and time is exactly what third party logistics provide you.

Take full advantage of that extra time and go build an even stronger supply chain!