Are you still wondering why so many of your competitors are partnering up with third-party logistics companies versus doing it all in-house?
Well, the answer is really simple... partnering with a solid 3PL will save you a large chunk of time and money. The advanced freight management solutions that they provide are built to streamline processes, reduce overhead and increase efficiency in your supply chain.
Here are a few of the top benefits of working with a 3PL...
Freight Rate Contract Negotiation
The most basic LTL freight management solution a 3PL will provide is freight rate contract negotiation.
LTL pricing agreements are consistently becoming more and more complex and without extensive knowledge of LTL contracts, shippers are leaving savings on the table. Working and negotiating with carriers requires vast industry knowledge, reputability, and leverage – all characteristics a reputable non-asset-based 3PL should have.
Your logistics service provider can negotiate rates to your specific lanes so you never have to wonder if you’re getting the best deal out there. At the time of your shipment, you will be able to access and select carriers that meet your cost, insurance, and delivery time needs through a transportation management system (TMS) that has your predetermined, custom rates built-in.
Freight Technology: TMS Platforms are Key
Plain and simple... Shippers who utilize some sort of TMS, in turn, have a much more efficient supply chain.
A TMS provides so many advantages essential to effective LTL shipping:
Better route planning, load optimization, carrier mix, and mode selection
Flexibility to make changes in delivery plans
Accurate data for analytics and reporting
Data to plan for on-hand inventory
Cash flow improvements through proper freight accounting
Visibility into the transportation supply chain
The benefit here with a 3PL is that they will have a TMS dashboard (or a full-blown LPaaS) already in place to which they will simply grant access to your company and then you are on your way. While that is a sort of obvious benefit to this partnership, it cannot be highlighted enough. Trying to front-load all that would be required to not only vet various TMS software ahead of time, get it implemented and learning how to use it would more than likely be enough to instantly get you to consider calling around to a few 3PLs for help.
Freight Data Analytics & Reporting
3PL’s are constantly improving and creating new technology for their customers. Giving them access to copious amounts of information that can be used to make better business decisions when it comes to cost savings.
These reports can grade your carriers, allowing you to see who not only gives you the best price but also delivers their shipments on time every time. An important factor when you consider how many customers the late shipments of the less expensive carrier might be costing you.
This data can also help you identify sales trends and geographic trends, allowing you to focus efforts on untapped regions or focus on marketing during slower months. Once you start incorporating big data analytics, you can also begin to forecast more accurately and predict inventory needs.
LTL Freight Accounting
Freight accounting is a major area that can critically affect a shipper's bottom line. In fact, some studies have shown that 1 out of 4 freight bills contains an error. Needless to say, manually auditing hundreds of invoices per week is highly time-consuming.
Personalized Customer Service: Freight Claims and Track & Trace
The value of hiring an outsourced freight management services provider is more times than not they come with a personalized customer service mentality and team. They will provide you with a direct contact who is responsible for any customer service-related issues, with the goal to reduce the customer’s workload in any way possible. This team will handle claims management, track and trace, expediting, data procurement, reporting, invoicing, and auditing.
If you’re currently working with a logistics service provider that isn’t providing you with the above freight management solutions, it may be time to start looking into a new, more innovative provider. If you aren’t using a 3PL at all, maybe it’s time to spend a little bit of time exploring your options and determine if utilizing a 3PL might be the right fit for you and your supply chain.
If you’re interested in learning more about how the Redwood team can help you implement these solutions, feel free to reach out to us here.