More than 15 years ago, the company of Armstrong and Associates conducted a research which showed that about 46 percent of the companies included in the list of Fortune 500 are taking advantage of the services of third-party logistics or 3 PL for short, to assist them with their freight arrangements. This year in May, the number of those companies just about doubled and reached over 85 percent.
The study also found that companies doing shipping for their business turn to third-party logistics businesses in order to obtain some more control over the costs as well as to improve the efficacy of the supply chain. At the same time, larger establishment uses the services of their-party logistics on a regular basis for their daily needs for shipping management.
So, why are companies increasingly more often turning to third-party logistics businesses? For one, the economy is changing in one way or another on a regular basis and has a powerful impact on the market logistics. The changes in the economy also play a role in the way companies operate including what they focus on and where they are trying to cut corners with prices.
Using the services of a third-party logistics company comes with some benefits, but the most important is that it saves the client company time, money, as well as efforts. By delegating some or most of the freight management to a 3 PL business, the client company can focus on another aspect of their business, and it can direct the saved money to better products for example.
Third-party logistics companies can be used to work as a one-stop shop that handles all logistics. That can help save increase efficiency, save time as well as make it easier to track freight costs. This convenience has made third-party logistic companies a popular option. They also offer a level of flexibility in that it allows businesses to customize after their needs, as a third-party logistics company can provide services to nearly any kind of industry, often in all states, across state borders or even globally, reaching worldwide.
The use of a 3PL company is taken very seriously. Shippers could spend hours entering data manually as well as coordinating shipping with some carriers. That time could potentially be used for enhancing or creating new products which is why companies are using third-party logistics.
Another thing that a 3PL company can provide to its clients is visibility which is an essential aspect of doing business. Other benefits of using the services of a third-party logistics company are the in-depth account reviews which help better understand sales. Using such services can also help a business to cut down on some expenses which is one of the deciding factors that have companies using them in the first place.
To provide some solid facts as examples of the benefits, in a 3PL study it was discovered that 86 percent of the shippers surveyed noticed an improvement in their customer services. 73 percent stated that they believe that third-party logistics businesses have a lot to offer regarding innovative methods to improve the effectiveness of the logistics.
At this point, it is very likely that rising businesses will also be using the services of a third-party logistics company. If the trend continues, the logistics market can anticipate a prosperous time.
Justin Bright – CEO Brighter Logistics