How 3PLs, Mobility, and Digitization Are Creating Nimble Supply Chains
Many companies are improving their fast delivery services with options like one-hour services. This lickety-split delivery time is being met by outsourcing delivery services. More businesses are thus lowering costs while obtaining a competitive edge by outsourcing transportation management and other logistics services.
Logistics often grow into large, unwieldy, and costly backends of businesses. Third-party logistics providers (3PLs) are keeping supply chains cost-efficient, innovative, and nimble. Here's a look at how they do it.
Saving on Costs by Realigning Competencies
An advantage of third-party logistics providers is their ability to focus on core competencies. This means that a delivery driver may not be included in the new $10 minimum wage policy of the company. But they could be getting a higher minimum wage and more perks from the third-party logistics services provider. The 3PL has more flexibility in the recruitment and retention of drivers. Major shipping companies, meanwhile, saves on labor costs and have more time to focus on their core businesses.
Leveraging Economies of Scale
3PLs are more innovative. They make better use of technology, space, and transportation. Larger loads allow transportation methods to be flexibly switched out. Materials procurement is cheaper. In transportation management, deals can be negotiated on fuel, repairs, and other services. These economies allow third parties to negotiate attractive perks for drivers in competitive labor markets. Perks may include special discounts at dedicated hotels, restaurants, and gas stations.
Developing Logistics Chain Transparency
Third-party logistics solutions force companies to improve logistics chain transparency and responsiveness. Data is shared from the suppliers through to the delivery service in real-time across mobile devices. Communication, people practices, and operating policies can be harmonized across a mobile app. These more flexible practices save on expensive IT infrastructure and improve the ROI of businesses.
Creating Digital Data-driven Loops
The more innovative use of technology further cuts down on IT expenses. Improvements range from automating warehousing and inventory management to placing the entire supply chain on a transparent blockchain. This enables supply chain 3PL solutions that opportunistically move resources across warehouse space and transportation modes to exploit efficiencies and cost savings. The advantages of mobility and digitization will help drive average annual growth of 9 percent in third-party logistics services to $1.8 trillion by 2026.
For many companies, the decision to outsource a core competency to third-party logistics services is fraught with risk. In practice, the rewards have far outweighed the risks. You can learn more about how they can benefit your business by contacting a few third-party logistics services.
