If logistics and shipping are crucial to your business, it makes sense to ensure that those tasks are fulfilled efficiently and cost-effectively. This might become overwhelming over time as your business grows and your responsibilities in other areas evolve. In that case, you can rely on 3rd party fulfillment companies. Also known as third-party logistics (3PL), these companies may be the key to ensuring a seamless process of getting your products shipped and delivered on time to your customers!
About
3PL
Knowing
the pros and cons of 3PL companies can help you decide if their services are
right for you. But before that, it’s important to know what their services
truly mean.
When
it comes to a business that sells products, logistics pertains to the movement
of items through a supply chain. This may include retail inventory management,
storage and warehousing, fulfillment and distribution, and pick and pack
fulfillment. Third party logistics is when your business outsources those
responsibilities to another company that can take care of shipping, storage,
fulfillment, and other areas of supply chain management.
Why
outsource?
3rd
party fulfillment companies can enhance your business in many ways, especially
if it is growing and you are already having difficulty in keeping up with
in-house tasks. With their service, you can focus more on your business and on
its core competencies. Down the line, they may be able to help your business
increase its productivity and efficiency, maintain flexibility, expand
logistics capabilities, access logistics expertise, and stay up-to-date with
logistics practices. Here are more benefits you can expect from them:
Cost
savings
Third
party logistics may seem like an extra expense, but that can easily become
cost-effective when you realize how it can boost your productivity and reduce
your risk of making costly mistakes. A 3PL provider may also be able to help
prevent surprise expenses that may occur during the movement of goods.
Enhanced
efficiency
Reputable
3rd party fulfillment companies have extensive global networks with
established routes and warehouses in key locations. This way, they may
consolidate shipments and storage to increase efficiency and reduce costs.
Access
to cutting-edge technologies
Reputable
3PL providers are always equipped with the latest technologies for inventory
management, automation, shipment tracking, and other areas. They offer
cutting-edge technology through EDI and WMS systems to ensure electronic
connectivity, full visibility, supply chain analysis and reporting, process
improvement, and ROI measurement. They help eliminate some manual processes to
speed up the delivery and fulfillment of orders.
Experience
Seasoned
3rd party fulfillment companies have a thorough understanding of the
customs, laws, regulations, business culture, and language of China. Their
extensive global network of logistics options also gives your company access to
outsource solutions and freight services.
Disadvantages
of 3rd party fulfillment
Working
with the wrong 3rd party fulfillment companies will make you prone
to experiencing some of the cons associated with them. Here’s what you need to
know:
Lack
or loss of control
3PL
might make you lose control over your supply chain and its operations. That’s
why it’s important to verify the capabilities and reliability of the service
provider to make sure that they can consider your requirements.
Expensive
The
upfront costs might make the service expensive. So, it makes sense for your
business to be more financially stable before you invest in 3rd
party fulfillment.
Lack
of transparency
Some companies are unable to be transparent with their clients due to language barrier or simply because they choose not to. So, it’s important to verify the reliability of the service provider before you entrust your logistics and fulfillment processes to them.
