The Benefits of Outsourcing Logistics

When you first start a business, logistics are probably the furthest thing from your mind. With limited inventory and low sales volume, it’s easy enough to handle most of your warehousing and transportation internally. But as you grow, it becomes increasingly difficult to take on all that responsibility yourself. Partnering with a third party logistics provider (3PL) enables you to scale your business efficiently and keep your customers happy.

What Does a 3PL Do?

A 3PL is an essential part of the supply chain. They take care of all warehousing and inventory management, order fulfillment, packaging and shipping, and transportation needs, freeing you up to focus on other important aspects of your business.

Trusting somebody else to handle such an essential part of your operations might make you nervous at first, but 3PLs are outsourcing and distribution experts with an existing infrastructure designed to streamline operations and ensure supply chain efficiency. When you hire a 3PL, you’re gaining a partner just as committed to your success as you are.

Can I Handle Logistics Internally?

Still hung up on taking care of your own warehousing, shipping, and transportation? It can be done, of course—but consider the ramifications.

• You’ll need additional staff, which translates to higher labor costs.
• As your volume grows, you’ll need additional warehousing space.
• Be prepared for higher transportation costs. In addition to purchasing vehicles, you’ll pay for fuel, maintenance, and insurance.

The truth is, outsourcing logistics is likely to save you money in the long run.

5 Key Advantages of Outsourcing

Outsourcing your logistics with the right 3PL can pay off in many ways. Here are some of the advantages you can expect by hiring an experienced logistics provider.

• Cost Savings. When you work with a 3PL, you’ll reduce or eliminate a lot of fixed and variable costs. You’ll spend less on labor, facilities, equipment, technology, fuel, maintenance, and insurance. Increased cash flow improves flexibility by helping you manage seasonal sales fluctuations and respond more quickly to customer demands.

• Improved Efficiency. An experienced 3PL has well-developed resources, technologies, and processes in place that enable your business to run more smoothly and efficiently. Their experience and analytics-based decision making ensure effective supply chain management and minimal disruption to your operations.

• Technology & Expertise. Technology is often overlooked because it’s expensive, always changing, and requires a high level of knowledge. When you outsource your logistics, you’ll gain access to state-of-the-art technology; 3PLs invest heavily in software in order to streamline supply chain processes and make inventory management and transportation as efficient and cost-effective as possible. They also hire skilled developers and programmers to manage these complex systems.

• Customer Satisfaction. Two of the most important factors in keeping customers happy are accurate order fulfillment and speedy shipping. A 3PL with established processes and the latest technology will help fulfill and ship your orders quickly with minimal errors. When problems do arise, they handle exchanges and returns on your behalf, as well.

• Focus on Core Competencies. It’s no secret that running a business is a demanding and time-consuming process. Outsourcing logistics frees up time so you can focus on your core business, such as product development, sales and marketing, and other key business operations.

Ready to partner with a 3PL for logistics outsourcing? Contact G10 today!