Third party logistics companies have made it possible for online businesses, both in Australia and globally, to outsource shipping and fulfilment. These logistic companies have now become strategic partners who play a pivotal role in supply chains. Furthermore, logistics services are becoming increasingly competitive and offer tailored packages that cater to different needs.
This is because they know all too well that different companies have different requirements for distribution and delivery. 3PL companies are not only the ideal partners for small businesses, but also for large corporations that need a helping hand in managing their supply chains.
The proliferation of third party warehouse companies has been driven by demand from enterprises looking for cost-effective solutions in order to deal with an increased volume of shipping.
How does a third party logistics company work?
Third party logistics providers offer a wide array of services to cater to the broad needs of their clients. This includes providing warehousing facilities for storage of goods, managing and delivering shipments, coordinating with transportation companies, or even handling customs clearance on behalf of their clients.
They also provide comprehensive 3PL supply chain management and end-to-end delivery solutions tailored according to different requirements. One major advantage is that infrastructure investments like warehouses do not burden these third parties. Instead, they invest directly into them or partner with other owners renting out space at low prices.
Some third party logistics providers also offer shipping consolidation, cross-docking and reverse logistics services. Third party logistics companies should be able to adopt a strategic and customer-centric approach while offering their services.
This means that they need to understand the needs of customers for them to make informed decisions about shipping arrangements, facilities management, or supply chain coordination. Additionally, a third party logistics provider should adjust quickly according to changes in market conditions and trends affecting shipping and transportation industries.
Therefore, they are consistently striving towards innovation by introducing new products and solutions. This includes complete outsourcing agreements where clients outsource transport and other aspects related to warehousing and distribution.
How can third party logistics companies improve my business?
The role of these companies in your business is not only limited to offering freight and cargo services. They are strategic partners who can play a pivotal role in making the best use of supply chains. 3PL warehouse services can also help you provide more value for your customers by increasing efficiency and optimising all aspects of operations.
This includes better inventory management, improved customer service experience, and lower financial risks due to reduced dependence on external factors like fuel prices or lack-of-skilled labour, etc.
Third party logistics service providers are in a better position to manage complicated distribution chains caused by unforeseen delays, or other unpredictable events such as natural disasters that can impact production schedules.
Third party logistics companies offer experience, flexibility as well as scalability, which make it easier for businesses to grow faster than ever before without any limitations.
At a point when your customers demand more personalised services from suppliers, third-party logistic companies fill in the gaps by offering value-added services like cross-docking facilities (warehousing), packaging customisation, etc. This assures your business customer satisfaction at all levels, including on-time deliveries.
Another way you can benefit from third party logistic services is through economies of scale. This means greater reach, making it easier to serve a larger customer base without increasing operational costs. In addition, such third party logistics companies ensure faster deliveries at low prices with no delays in transit time.
How to choose a third party logistics company?
One of the factors that will affect your decision about picking a third party logistics provider is the stage of your business development. If it’s still in the early days, then outsourcing may not be the best choice.
Another consideration is the projected demand for your product. If it’s high, then outsourcing should be a priority because you’ll need someone else to handle inventory and distribution tasks so that you can focus on selling your products.
If your business relies on complex manufacturing processes or different products for specific customer groups, outsourcing may probably not be very necessary. Other factors include:
Hiring logistics providers with years of experience providing these services may help simplify this decision-making process as they know what factors go into success stories (and failures) in this industry better than anyone else. They’re also able to offer recommendations about how best to build your team around whichever model (outsourcing vs. hiring new staff) you choose.
As mentioned earlier, third party logistics companies play a crucial role in your supply network. 3PL companies are strategic partners who can offer best practices on inventory and warehousing costs while automating and streamlining shipping processes.
As a third party logistics company, Invenco offers you all these benefits with an expert understanding of best practices for inventory management, shipping and warehousing costs. If you’re thinking of starting an online business or are already running one, contact us and get a quote today!