Shipping rates are at the heart of determining a budget and setting the pricing scale for deliveries.
While it’s assumed that the carrier holds the cards with the rates, so to speak, you’d be surprised how powerful the influence of third-party logistics company is for negotiating better shipping rates on behalf of their clients. However, the exceptional rates for moving freight is a residual or ancillary benefit of having the 3PL manage aspects of their logistics network.
Third-party logistics companies work with carriers in all modes of transportation and send them millions of dollars of business every year. Like any other business, volume cures all and tends to establish a baseline for pricing.
So – let’s dive into a few of the reasons why working with a 3PL is a smart idea, beyond the savings on shipping rates.
3PL’s Help Improve Shipping Efficiency
For many shippers, the concept is very simple – you have a product that needs to be sent to a customer, so you call a carrier, set up the pick-up and delivery details, package the product correctly, and send it out the door. Others are overwhelmed with the concept of scheduling a shipment – and tend to overthink or overcomplicate the process. This is where the 3PL is beneficial.
A 3PL understands the entire logistics landscape. They realize that there are multiple steps within the shipping process that must fit seamlessly and work together in order to successfully move products through the supply chain. This big-picture perspective helps them fine-tune a shipper’s supply chain movement so that each step is efficient.
In the end, this efficiency helps companies save money, reduce freight delays, and ensure on-time delivery.
A 3PL Simply has Access to Better Shipping Rates
The goal of every business is to spend less money than you bring in on an annual basis. This is the bottom-line profitability and it is the heart that drives global commerce.
A major contributor to continue operating in the ‘green’ is by finding creative ways of reducing expenses. Of course, this must take place without compromising business efficiency, customer service, or safety.
This is an area that 3PL’s specialize in!
A third-party logistics company like Redwood Logistics is comprised of multiple stakeholders and experts. Experts who understand the ins and outs of the logistics industry.
They know which areas to ‘cut’ or ‘adjust’ to improve financial stability. By examining your existing supply chain network, your business philosophy, and consumer base, they are able to recommend changes that help reduce expenses.
3PLs Help Companies Find and Reduce Shipping Waste
All businesses strive to eliminate wasted resources. As a matter of fact, waste is one of the biggest financial pitfalls of most companies. Retail stores, manufactures, and even vendors all struggle with it.
But the industry that gets hit the hardest by this issue? Oh, that would be the shipping industry.
Whether it’s cross-training employees to handle multiple tasks or finding ways of reducing manufacturing supplies, theft or shrink of retail products, or environmental byproducts, the elimination of waste is a focus item for all businesses. The supply chain and logistics network are no exception.
3PLs work with their clients to discover areas, resources, or operational procedures that are contributing to waste. Then, they discuss actions to eliminate these issues and replace them with more efficient procedures. Less-wasteful procedures.
They also use their buying power to partner with carriers in all modes of transportation that provide better service offerings, at reduced costs. However, what they don’t do is look for the cheapest rates. Doing so often results in poor service, damaged freight, and ancillary costs that can shut down a business quickly.
With a 3PL, it’s all about VALUE, not cost.
They work with a detailed network of dedicated and professional carriers. All of which have exceptional service records, and operate ethically. Most importantly, they help drive sales with existing or new customers through their efforts.
The 3PL keeps those carriers in check. They do so by frequently auditing their services, billing, and safety or damage records. This is done to ensure the complete elimination of trouble-producing carriers from their pool.