Factors to Consider When Choosing a 3PL: Part 2

May 17, 2018 | Services | 0 comments

As businesses expand into emerging global markets, managing complex logistics operations become cumbersome. The challenges begin with but are not limited to establishing a supply chain that is aligned with the business strategies. The other concerns include obtaining licenses, language barriers, customs, and handling various currencies. Handling all of the logistics in-house incurs huge costs in terms of investment in technology, equipment, and manpower.

The use of third party logistics is a growing trend in the recent years. Statistics show that the market share of 3PL was $750 billion in 2016 and is expected to grow at a rate of 4% annually.

5 Key benefits of 3PLs

Here are some of the key benefits of using a 3PL provider:

Cost optimization: One of the key benefits of engaging a 3PL provider is to do with cost efficiency. Since the 3PL provider can offer shared space at the warehouse and transportation, the costs related to these are reduced. The 21st Annual Third-Party Logistics Study indicates that 75% of respondents who had outsourced logistics found significant cost reduction.

Better resources: A 3PL provider who has a global network of resources can be a key advantage when businesses expand overseas. The outsourced logistics provider can take care of hassles such as licenses, customs, and currency concerns effectively. Such a tie up can improve efficiency and optimize costs.

Transparency and accountability: In today’s competitive world, 3PL companies are not merely service providers, but are increasingly assuming a collaborative partnership. Increased accountability and transparency are some of the features of an efficient 3PL provider. The Third-Party Logistics Study revealed that 91% of the businesses and 97% of the 3PL providers believed their relationship was positive and successful. Transparency at every step is a key benefit that 3PL providers can offer. Businesses can track the data available including performance metrics and indicators to ensure accountability.

Improved customer service: With a better network of resources at their disposal, 3PL providers can meet difficult deadlines and speed up processes. In the study mentioned above, 86% of businesses surveyed said customer service was improved by outsourcing to 3PL providers.

Use of technology: 3PL service providers are quick to adapt to technological innovations and IT integration. Because the outsourced providers can distribute the cost among multiple clients, they can invest in advanced transportation and warehouse management systems. 3PL providers are in a better place to adapt to rapidly emerging technological innovations in logistics.

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

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