5 good reasons to outsource your supply chain (3PL)
Published on 26 November 2021
Logistics is a system that requires a great deal of organization, generates significant costs and is subject to numerous risks of malfunction. It also requires a significant mobilization of human resources. Faced with such challenges, more and more companies are asking themselves the question of a logistics service provider to optimize the functioning of their Supply Chain. Discover the benefits of this approach.
Logistics providers are increasingly offering services that go beyond simple storage. In particular, 3PL (Third Party Logistics) providers offer a range of services that take into account the entire supply chain. They offer specific expertise, regular monitoring and effective communication, particularly with regard to customs formalities.
This type of service differs from 1PL players, who provide limited outsourcing dedicated solely to nationwide transportation services, from loading to distribution of goods. There is also an in-between group, the 2PL providers, which enrich their services with storage and warehousing solutions. These are usually carried out on the premises of the commissioned company.
Here are 5 reasons to outsource your supply chain to 3PL (Third Party Logistics), also known as third party logistics or outsourced logistics.
1/ Free up valuable time through 3PL operational excellence
3PL providers allow you to focus on your core business and not waste financial, technical and human resources on activities you have little or no control over. Using a 3PL provider allows you to quickly access all the operational logistics and skills needed to carry out certain missions that would have taken you a long time if you had carried them out internally. According to the 2022 edition of the Third-Party Logistics study, published on 3plstudy.com, 73% of shippers agree that using a 3PL provider offers new and innovative ways to improve logistics efficiency.
2/ Cost pooling and significant economies of scale
The subcontractor is best able to offer you competitive rates, lower than the charges generated by the development of this same activity in-house. Indeed, he benefits from a mutualization of costs, realizes more economies of scale and benefits from a more important experience gain. Moreover, when you outsource transport, storage and everything else related to the handling of parcels, you no longer have to pay for personnel, a warehouse, your own fleet of vehicles or even the management of supply chain machinery. According to the Third-Party Logistics study, 64% of shippers agree that the use of 3PL has reduced their overall logistics costs.
3/ Facilitating international deployment
Having several 3PL companies with storage space around the world can go a long way in speeding up the distribution of your product. If you are targeting an international market or another country for example, this will give you a head start in your industry, which is not negligible.
4/ Reduce risks and constraints
Outsourcing your logistics allows you to reduce potential risks, whether it is an unavailability of your information system, unexpected volume peaks, theft, or even a total interruption of your chain. A domino effect that will generate penalties for suppliers, credit notes for customers, and a deterioration of your company's image. For your employees as well as for your company, outsourcing allows you to free yourself from the following constraints
- maintenance / replacement of supply chain machines;
- Management of driving hours and compliance with legal obligations;
- Management of accounting;
- recruitment, training, replacements;
- HR management (payroll, recruitment, dismissal, sick leave, etc.);
- adapting the workforce according to your seasonality and your activity peaks (recruitment, training, taxes...).
5/ Keep a total visibility on its logistic operations
Outsourcing your logistics to a service provider can leave you feeling like you have no control over this function. With a turnkey 3PL collaborative portal, you will have full visibility in real time on all your provider's operations. You will have a collaborative solution for managing and monitoring warehouse operations for faster start-ups of logistics activities.
These 5 advantages naturally lead to a significant improvement in customer satisfaction, a benefit highlighted in the study by 73% of 3PL users.