Ways 3PL Keep Logistical Operational Costs Low
When it comes to retail logistics, operational costs have a significant effect on the bottom line. For instance, your supply chain needs warehousing, trucking and transloading to make sure customers receive goods on time and in excellent conditions. However, while you can take care of these services internally, many people agree that they are best left to third-party logistics service providers (3PL). "What about the costs?" you might ask. Well, this article highlights how 3PL services help to keep logistical costs low while adding value to your supply chain. Read on.
Avoid Warehouse Management System Costs -- In today's highly competitive business environment, companies cannot do without a modern warehouse. However, you need a warehouse management system (WMS) for operations to move smoothly. For instance, inventory management, shipment, picking and packing operations all rely on WMS. Due to its significant role in warehouse and logistics management, warehouse management systems do not come cheap. Notably, the cost of a robust and powerful WMS can run into the six-figure region. Since a 3PL service provider already has a WMS, partnering with them helps you to skip the cost and still enjoy the benefits.
Avoid Costs of Mistakes -- Whichever industry you operate in today, the fact remains that the marketplace has never been this competitive. As such, businesses rely on their logistics operations to ensure a smooth eCommerce fulfilment and retail compliance, among other functions. Simply put, the stakes couldn't be any higher; therefore, you can only remain competitive if you approach your logistics operations with the highest level of expertise. 3PL service providers offer the highest level of expertise. Consequently, it ensures that your supply chain runs optimally, efficiently and most importantly, with limited downtime.
Cross Docking Services -- If you are using a shared warehousing (public warehouse) model, the truth is that you will still pay for the space whether you use it at all times or not. If your volumes are modest, then shared warehousing makes sense because the costs will be manageable. However, if you are shipping huge volumes, then you need a strategy that will not significantly affect your costs. Enter cross-docking. 3PL service providers are well versed with cross-docking services. Goods are delivered to a third-party logistics loading dock for temporary storage. Alternatively, the products can be transferred directly to another waiting truck, thereby eliminating storage. Cross-docking by 3PL services allows businesses to skip on warehousing, thus saving significant amounts of time and money without affecting distribution.