The stats are in; back in 2017 as many as 90% of American Fortune 500 companies outsourced tasks to third-party logistics companies.
However, the decision to outsource these kinds of jobs needs to be considered very carefully. This is especially true of bigger enterprises who already have their own warehousing and distribution solutions up and running.
Needless to say, there are disadvantages to using third-party shippers. However, in this article, we’re focusing on the benefits they have for your business.
Hopefully, this info will help bring you closer to answering the question; When’s the right time to outsource business logistics?
Let’s dive in!
1. Save Money
Funding your own logistics solutions can be incredibly expensive.
More often than not, hiring a third-party logistical (3PL) service is more cost-effective than paying for the necessary warehousing, technology, and transport to execute a reliable logistics plan.
With so many vital services available from one business, you’ll eliminate the need to spend money on various accounts and labor to support your in-house logistics system.
Not to mention, 3PLs often combine all their customers’ freight enabling them to ‘bulk buy’ from couriers. As such, they can negotiate incredibly competitive prices which you otherwise wouldn’t be able to access.
2. Reduce Your Risk
In short, most trusty 3PLs have the technology to monitor their solutions all day every day.
As such, they can successfully predict potential problems and tackle them to ensure operations run smoothly. In fact, the use of artificial intelligence and machine learning is becoming increasingly common in this industry.
This kind of sophisticated tech gathers thousands of data points and examines them to detect any potential issues that could arise. For example:
- Previous events
- The weather
- The likelihood of future problems
You get the idea!
3. Up to Date Technology
It’s typical for 3PL companies to invest in the latest technology. For example, the Internet of Things (IoT) should now be expected as standard for logistics providers.
IT services provided by 3PL companies are essential to the smooth running of logistics solutions. These IT programs are usually integrated to complement the customer’s current system to give you access to real-time inventory updates.
For your convenience, these notifications can even be sent to your smartphone.
4. Industry Expertise
A top-notch third-party logistics provider keeps up to date with all the industry best practices both in terms of manufacturing and technology.
These companies often have years of experience helping customers with the following:
- Finding the most efficient route to transport your goods.
- Assessing and deciding potential courier options
- Advising on inventory management
- Tips on handling warehouse operations
Just to name a few!
5. Scale Your Business
If you’re looking to scale your business, a 3PL could help you with that. Namely, because most 3PL’s have the infrastructure to turn around speedy deliveries on behalf of their customers.
This comes in incredibly handy for responding to boosts in customer demand or handling any promotional sales you’re hosting.
Plus, it’s common for 3PL’s to also help you enter new markets by introducing you to new suppliers. This is especially useful if you’re an e-commerce business.
6. Develop Your Team
Outsourcing logistics frees up your teams time. This gives you a chance to re-train your staff and further their skills. The greater the expertise your team has, the more valuable they are to your brand. It really is as simple as that.
The same is true of you as an entrepreneur. If you’re spending hours overseeing your in-house logistics solutions, you’ll gain tons of your time back when you outsource these tasks.
As such, you can turn your attention to more important activities that help expand and grow your business. For example:
- Designing new products
- Securing new clients
- Launching cost-effective marketing campaigns
- Breaking into new markets
You get the idea. Obviously, you’ll have a better idea of the things that need doing to rake in the money!
7. Provide a Better Customer Experience
You don’t need us to tell you, that consumer expectations have rapidly increased. More and more customers want quicker deliveries (some as speedy as 24-hour turn arounds).
When you use the services of a 3PL, you can make the most of their resources to help you meet the increasing expectations of your customers.
Here are just a few of the tools these sorts of companies have at their disposal that help with this:
- Automated warehouses
As such, you should always see if a potential 3PL has these kinds of tools in place to help you execute faster deliveries.
Has This Helped You Plan Your Business Logistics?
As you can see from the above info, there are plenty of benefits to outsourcing your logistics services. However, you need to ensure the company you choose is reputable, has access to the latest technology, and can prove their reliability.
This helps to ensure a good return on your investment. Luckily for you, here at ATS, we can help you with that. Please feel free to reach out and contact us. We’d love to help you set up a business logistics solution that you can depend on, speak soon!