ProShip shipping experts share how Third-Party Logistics companies are increasing efficiencies and lowering costs.
Over the last several months, we have highlighted the volatility for both shippers and their providers alike in the current supply chain ecosystem. Both shippers and their carrier partners have fought to navigate through changing demand, capacity constraints, and the coming unknown. One strategy that many manufacturers and retailers have adopted to combat these challenges is to use Third-Party Logistics (3PL) providers.
3PL Shipping Statistics
So many 2022 statistics prove just how significant it has been for shippers to use a 3PL:
73% of 3PL users (the shippers) agree that the use of 3PLs has contributed to improving service to the shippers’ customers.
With disruptions because of the pandemic, we’ve seen that e-commerce can no longer be predicted along a patterned approach. Customer habits have moved online, and delivery expectations for those shipments have accelerated. Consumers expect to have delivery options that are fast and convenient for them – and we know how much a positive Customer Experience (CX) really matters. [How Much Could a Bad Shipping Experience Really Cost You?]
A 3PL partner can decentralize fulfillment across inventory locations in different regions. Because 3PLs often have close relationships with carriers, they can not only negotiate discounted rates for their partners, but they can offer expedited service options, like 2-day or next-day shipping from distributing inventory across fulfillment centers all over the country.
With the right technology in place, 3PLs can streamline and automate the fulfillment process utilizing advanced functionality to route each incoming order to the ideal fulfillment center for distribution. In addition, with end-customers across the country, inventory can be stored in multiple fulfillment locations. Once the product is closer to the customer, you shorten transit times and can offer faster service options, like 2-day or next-day shipping by a ground service.
64% of 3PL users agree that the use of 3PLs has reduced overall logistics costs.
When you partner with a 3PL, you leave the supply chain tasks to the experts. By outsourcing to a 3PL, you eliminate several of the overhead costs that shippers typically confront, such as renting a warehouse space and finding the labor to work it. With warehouse space at a premium, utilizing a 3PL only makes you pay for what you use and what you ask for.
Because a 3PL’s core competency is in supply chain, they have strong carrier relationships. More advanced 3PLs even assist with negotiations for volume discounts and can offer those discounts to their customers. Because of the incredible volume that a 3PL ships, they have discounts available for courier and single item shipments, lowering the cost to ship Direct-to-Consumers (DTC), but you are still able to utilize your own discounts if you have them. [Learn more about the Top 4 DTC Parcel Shipping Challenges]
3PLs use sophisticated technology to manage their operations. Armed with the current laws, regulations, and relevant shipping information, a 3PL partner will maintain compliance to avoid the fees associated with improper Dangerous Goods (DG) shipping, an expensive liability that no shipper wants to deal with. 3PL providers also understand the importance of a correct address helping shippers avoid bad shipping data. Address validation capabilities can be complex for a shipper to take on individually, but a 3PL partner will minimize the chance for unexpected shipping costs due to bill backs. [Listen to the ParcelCast: How Address Quality Shines the Light on Dirty Data]
73% of 3PL users agree that 3PLs provide new and innovative ways to improve logistics effectiveness.
Because 3PLs have a large number of partnerships and relationships across the industry, they can engage in shipping consolidations and shared warehousing, saving shippers money both short term and long term.
Partnering with a 3PL can help streamline your supply chain with visibility, often real-time, into the many moving pieces. With this transparency, you can make more educated decisions for the rest of your business. 3PLs can also manage the communication with carriers for any type of disruption: weather, traffic, or hours of service. They are coordinating shipments, so you still meet customer delivery promises.
With an integrated Enterprise Software Stack (ESS), a 3PL will be able to view real-time updates and data on your shipments and be able to adjust your supply chain as needed, to boost efficiencies. With this better visibility, comes better decision-making capabilities, enabling the best use of your transportation budget.
How 3PLs can become first choice for retailers and manufacturers
With a laundry list of benefits from partnering with a 3PL, it just makes sense to integrate this into your supply chain. Finding the right 3PL to boost your omnichannel fulfillment strategy can be a complicated task – especially with startups flooding the market from pandemic-fueled capacity crunches. Not to mention the other 14k+ 3PL businesses in the US as of 2022. One caveat that could separate those who should be on your list from those who can’t compete is their shipping software solution.
A partner who utilizes the industry-leader in automated multi-carrier parcel shipping software has the advanced functionality and experience to take on the parcel shipping challenges that are plaguing 3PL providers. With a legacy of satisfied and thriving customers, ProShip’s automated solutions deliver value with a seamless integration into existing systems and technologies to simplify shipping processes.
With key features that can level-up transit times and cost management, ProShip offers…
- Business Rule Management: Utilize enhanced functionality to execute complex business rules that are unique to your specific business to better serve a positive CX.
- Automated Rate Shopping: With the most advanced rate shopping capabilities on the market, 3PLs can meet customer delivery expectations with the most efficient service method.
- Simple Carrier Onboarding: Because onboarding shipping carriers is simple and cost-effective, 3PLs can offer a diversified carrier mix to shippers looking to balance carrier volume, costs, and service options.
Schedule a Demo with ProShip
To learn more about ProShip’s flexible and scalable multi-carrier shipping software, schedule a demo with our shipping experts.