Most logistics managers believe they are getting the best shipping rates possible. Unless they are working with a logistics partner, however, they are probably leaving money on the table. Working with the right resource is often the best way for a business to build the most efficient shipping operation.
A logistics partner can benefit your business in the following ways:
Lower Shipping Rates
It is best to leave negotiation to the experts. A third-party logistics partner can provide lower rates and/or better service than what you are currently receiving because they know exactly what current market value is. Lower shipping rates add to your bottom line while enabling you to offer competitive shipping fees to your customers.
Performance Efficiencies
Working with a logistics partner can improve your order fill rate and accuracy. This equates to time savings, getting orders out faster to keep the customer happy. And, since a 3PL maintains your warehouse, you do not have to worry about room for expansion, and costs like IT systems and staff. This enables you to focus on growing your business because you are not using your time to manage your logistics on a day-to-day level.
Inside Information
There are always a lot of changes in the shipping industry, which are hard to keep on top of. For example, the annual price increases from FedEx and UPS make pricing contracts complicated, not to mention the continual surcharge changes. A partner who works with these carriers daily gives you an informational advantage about the industry that you would not have otherwise.
Simplify Your Business
Shipping rates are very complex, which makes it difficult to do an analysis of your shipping costs and carrier rate proposals. Carriers make it hard to compare its bids, but logistics providers with technology and expertise can decipher complex rate contracts to make the best choices about your shipping options. A true market analysis from a provider can give you the edge in negotiations as you’ll know exactly how far you can push to get the best price.
Improved Security
All shipments are subject to theft, either in a warehouse, truck, or port. A GPS system allows for tracking at all times during a shipment’s journey to its final destination. Advanced security systems that are incorporated in some logistics providers’ trucks allow them to be stopped remotely if necessary in an instance of theft or hijacking. In addition, many logistics providers have improved their security records to include digital technology where snapshots of truck drivers are taken to make sure there are no fraudulent drivers.
The tools and analysis that a 3PL can provide are ones that most companies do not have. The right logistics partner can give your company results that it would not be able to achieve otherwise. As a logistics manager, finding ways to cut costs while improving service to customers is always the right decision.