Factors to Consider When Choosing a 3PL: Part 3

May 17, 2018 | Services | 0 comments

To outsource or not to outsource..

With the growing complexity of logistics operations and globalization, many companies have chosen to outsource to a third party logistics service so they can concentrate on what they do best. A company can either build a logistics team entirely within the company or outsource the operations to a 3PL provider.

Advantages of in-house logistics:

With an in-house logistics management team, the advantages are:

• Companies know their business operations best
• It is easy to resolve any issues internally
• Flexible approaches

The disadvantages of managing in-house logistics operations are as below:

• Require huge manpower
• Huge initial investment
• Involves complex management and more work
• Technology upgrades can be costly to implement
• Less options for carriers and rates may not be competitive
• More overheads

Additionally, there can be unplanned expenses that can creep up such as rate fluctuations, new regulations that require upgrading to new technology or sales drops.

Advantages of 3PL
Outsourcing or 3PL market share in 2016 was $750 billion and expected to grow at a 4.6% in the next five years.

Outsourcing can give the following advantages over in-house logistics

• Less overheads
• No initial investment
• Less staff needed
• Better competitive rates from carriers
• Latest technologies

The cons of outsourcing can be difficult in maintaining the relationship and ending it. Outsourcing can mean less control over many aspects of supply chain and problems communicating with the transporters or drivers directly.

Successful symbiosis

But with evolving symbiosis, 3PL companies are not merely service providers. 3PL’s are increasingly assuming a collaborative partnership with increased accountability and responsiveness. 3PL service providers are also quick to adapt to technology innovations – the demand of the hour.

According to a 2017 global study 97 % of 3PL service providers and 91 % of companies that have outsourced to 3PL describe their relationship as positive and successful. In 2012, 88% of companies that had outsourced had believed the arrangement was positive.

The study called 2017 21st Annual Third-Party Logistics Study, also highlighted the fact that 75% of companies that have resorted to 3PL found significant cost reduction in logistics while 86% of these believed customer service was also improved by outsourcing.

The right 3PL provider should be flexible enough to scale operations as required. Given the market fluctuations, there could be low or increased demand at times. A 3PL provider who has the required experience and width to handle all kinds of operational requirements is the right choice. Check if the provider has worked with both big and small enterprises before and is able to make constant adjustments to suit your changing shipping needs.

Oceanstar by Seldat has built a favorable reputation as a global transportation logistics and procurement partner over many decades. We provide the advice and supply chain management you need, whether it be for the procurement of products or the transportation of cargo via ocean, air, trucking, or rail. Click here to learn more about our network and contact us if you would be interested in speaking with an Oceanstar representative.

View Part 1 and Part 2 of this blog series here: (Factors to Consider When Choosing a 3PL: Part 1)  (Factors to Consider When Choosing a 3PL: Part 2)

Global Guidance. Trusted Partnership.



Paul Conolly

Paul leads the Executive Team for the Oceanstar Group. Prior to founding the company, Paul enjoyed a distinguished career with OOCL–both at sea and ashore. At sea, Paul rose through the ranks to become OOCL’s youngest captain at the age of 27. After coming ashore, he held key management positions in both Asia and North America. Paul’s greatest strengths are his industry experience, critical thinking, and his leadership that extends to developing people and building robust teams and partnerships. Paul is a lifelong learner who is actively involved in supporting education. He has served on a number of non-profit Boards in the past, including the Waldorf School of Orange County, and is currently on the Board Of Trustees for the Association Of Waldorf Schools Of North America. Paul is married with two children and is an avid soccer fan.

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James Conolly

James oversees financial planning, manages risk, and evaluates strategic growth opportunities for Oceanstar as well as liaising with existing and potential investors. Prior to joining the company, James worked in banking, most recently with Barclays Investment Bank. During his 18-year banking tenure, James worked across multiple industry sectors, including Transportation and Logistics where his consultative approach to financial risk management has safely steered many companies through turbulent market conditions. James relocated from the UK to Southern California in April 2016 with his wife and two children and has wasted no time in learning to surf.

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Cara Conolly

 

Cara guides the Oceanstar team in the realm of Human Resources, operations, and payroll. Co-founder of the company, she draws from her many years as an educator and her studies in psychology to help develop the potential of each member of the team. Cara’s greatest strengths are her strong business acumen, solution-based orientation, and real connection to people. Cara loves cooking, hiking, traveling, and spending time with family and friends. She is married with two children.

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Irene Lim

Irene Lim spearheads Oceanstar Group’s Sourcing division with responsibility for all aspects of the business including sourcing, trading, import/export, and logistics. Prior to joining Oceanstar, Irene was the Export Sales Manager for ARC Air Logistics. A veteran, with over 30 years of experience in commodity sales, sourcing, and freight forwarding, she brings extensive knowledge, a true sense of urgency, negotiating prowess, and well-established contacts that enable her to execute seemingly impossible deals. Because helping and serving others is her passion, Irene makes herself available to her customers with full dedication. Irene loves to cook, spend time with her three daughters, and unwind with her DVR.

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Logan Moore

Logan manages Oceanstar’s Global transportation division with responsibility for business development, agency alignment, staffing, and regulatory oversight. Most recently, he served as a Director of International Pricing at Suddath Global Logistics. Logan began his 30-year freight forwarding industry tenure as an import documentation runner and warehouse employee. Through his advancement, he has learned every aspect of the business while building steadfast relationships. Logan’s nuanced industry knowledge and exceptional negotiating skills benefit Oceanstar’s partners at every turn. Raised in Chicago with a particular love for the game of baseball, Logan was a long suffering Cubs fan but with the Cubs ending a 108 year drought his loyalty has finally paid off.

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Paul Conolly

Paul leads the Executive Team for the Oceanstar Group. Prior to founding the company, Paul enjoyed a distinguished career with OOCL–both at sea and ashore. At sea, Paul rose through the ranks to become OOCL’s youngest captain at the age of 27. After coming ashore, he held key management positions in both Asia and North America. Paul’s greatest strengths are his industry experience, critical thinking, and his leadership that extends to developing people and building robust teams and partnerships. Paul is a lifelong learner who is actively involved in supporting education. He has served on a number of non-profit Boards in the past, including the Waldorf School of Orange County, and is currently on the Board Of Trustees for the Association Of Waldorf Schools Of North America. Paul is married with two children and is an avid soccer fan.

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