When your business grows quickly you must also be ready to meet the extra demands of managing inventory, logistics, and warehousing. One of the ways of rising to the occasion is to invest in building the capacity and the competency in-house, while another viable way is to outsource the job to a third-party logistics (3PL) company. While you need to weigh the pros and cons of each method, it may help to know that according to Supply Chain Dive, 90% of domestic Fortune 500 companies rely on third-party logistics service providers. An overview of the top reasons for you to consider hiring a third-party logistics company:
Outsourcing Requires Less Investment
By outsourcing your logistics and warehousing services, you can reduce investment and costs significantly. There will be no need to invest in distribution infrastructure, information technology and management information systems, fleet, maintenance, and staff. You will benefit by sharing freight costs with other customers and getting rid of the liability for freight and logistics operations. In a single shot, you can pass on liabilities for physical damage, staff recruitment and compensation, and potential IR problems of unionized staff. According to Forbes, you should also look at the quality of service and reliability and not always go for the least-cost partner.
Increase Flexibility and Agility
Adjusting warehousing capacity and personnel to handle fluctuating demand can be challenging. Building more capacity than usually required to handle peak demand is cost-effective. It is smarter to engage a 3PL company like Thinnes Transport, Inc that can ramp up infrastructure and workforce depending on the cumulative demand of its customers.
Follow the map –
By outsourcing, you can be sure that you can match your logistics cost to your revenue stream. Additionally, you will be better prepared to access new markets quickly as the logistics partner will be ready to ship faster than you would be.
Access to Advanced Logistics Software Solutions
Because of the scale of operations, logistics companies can invest in more sophisticated infotech systems and keep them updated than individual businesses. Investing significant amounts in logistics technology may not be justifiable when you want to focus on your core activities. Outsourcing the logistics function can provide easy and cheap access to sophisticated technology for complete supply chain visibility and ensure end-to-end automated processes. You get all the information you need for better-quality decisions to ensure better distribution management and customer services.
Optimize Your Supply Chain
When you outsource your logistics and warehousing requirements, you will free up a lot of time and resources better employed in managing core aspects of your business. You get the advantage of professionals handling your logistics and warehousing requirements with high-efficient and cost-effective strategies. In addition to deploying advanced software and technology to ensure supply chain optimization, you will also benefit from their experience with other customers to meet the ever-changing expectations of customers in a highly competitive market.
At the end of the day, engaging a third-party logistics company will ensure you optimize your supply chain, incur lower costs, and avoid capital investment and the problems of hiring and scaling infrastructure and workforce to meet dynamic market demands.