As e-commerce continues to skyrocket, the logistics industry has faced unique challenges that have forced businesses to rethink what services they handle in-house. Many companies, particularly small- and medium-sized ones, have chosen to work with a 3PL (Third-Party Logistics company). Companies that want to optimize their supply chain choose to partner with a logistics provider for many logistics services. A 3PL can assist with warehousing and distribution, fulfillment, and transportation management systems.

Benefits of Using a Single-Source 3PL

Does working with a 3PL make sense for your business? Here are six reasons why creating a relationship with a single 3PL benefits your company:

1. A 3PL Values Your Relationship. A relationship with a single source 3PL benefits your business in many ways. When you have contracts with multiple 3PL companies and transportation providers, each deal is separate from one other. With a single 3PL, you are entrusting them to a large portion of your business. A 3PL will value that partnership while understanding the overall strategies and goals of your business and will go the extra mile to meet your needs and requirements.

2. You will Get More Reliable and Available Data. 3PL’s are in the business of data management so working with a single provider means a higher level of data management. Getting data from multiple providers and having to analyze it can tax IT resources. With a single provider, data will be delivered in one format that is compatible with your systems for visibility and analysis. A logistics partnership with one provider gives a point of contact that understands your business today and in the future. The data you are provided with comes in format that can be used to make decisions in the future.

3. There are LTL Freight Consolidation Opportunities. In response to changing customer expectations, shippers are seeking a way to improve the speed-to-market and accuracy of their shipments, while lower costs. Shippers should look for partners that consolidate their freight with other LTL freight from other shippers. This results in a shared truckload for faster and less costly deliveries. LTL consolidation programs:

• Improve customer satisfaction
• Increase consistency in the supply chain
• Create relationship synergies
• Increase savings with volume and scale

4. Your Business Will Enjoy Improved Flexibility. Flexibility is important for creating better logistics performance so the ability to scale is an advantage of using a third-party provider. 3PL companies have networks and processes that can help your business scale when necessary. Their resources help to make changes along the supply chain to find solutions to challenges. A single-source logistics provider can give your business the ability to scale labor, warehouse space, and transportation. Businesses that have peak or seasonal periods will find that the flexibility offered by a 3PL allows them to achieve unlimited growth.

5. You Can Achieve Economies of Scale. Economies of scale can be achieved when working with a 3PL. Because a logistics provider has access to a large network, operational performance is optimized and shipping becomes cost-effective. A 3PL already has established relationships and networks across a wide range of services so working with one will cut costs as they rely on their network to get you the best prices.

6. 3PL’s Reduce Risk. All shippers are affected by damage and loss at some point. If a 3PL is quoting rates that are too good to be true, they usually are, and the outcome will be seen in poor service. In order to give those rates, those 3PL’s will most likely not be handling shipments safely or carefully. An integrated logistics partner, however, will handle your cargo with the utmost care, combining competitive rates with quality and safe shipping. They realize that the partnership is long-term and want to make sure they are upholding their part of the partnership.

Sudden swings in supply and demand in a volatile market mean that businesses constantly have to scale their business. Red Arrow Logistics will provide the knowledge and experience that companies need in today’s ever-changing logistics market. The benefits of working with a trusted provider like Red Arrow for all your logistics needs can help to improve operational performance to create value through the supply chain.