3 Reasons Why 3PLs Are Here To Stay

There is no getting around it – the words broker and outsourced have gotten a bad rep. But even amid this negativity, 3PLs (third-party logistics) providers continue to grow in popularity and permeate every industry in the United States. The question is how.

But first of all, it is important to understand that 3PLs are the brainchild of this century. The poor image they had at the beginning is starting to seem more like an issue of the small 3PLs companies making their debut in the industry having a few teething problems.

3PL Here To Say

Proof of this lies in the fact that many organizations fully embrace the services these companies offer. In fact, a majority of Fortune 500 companies (80%) and Fortune 100 companies (96%), use the services provided by 3PLs companies. So, outsourced transportation and logistics is becoming a serious issue for all companies.

But why? Why are 3PLs so popular, even among large, well-funded organizations that can handle these issues themselves? Here are three reasons why.

3 Reasons 3PLs Have Gone Mainstream

Economies of Scale
Third-party logistics companies can do the same thing companies can, but for less money because they are larger. It also helps that they are into the business for good, not for a season like most companies would be if they handled this part of the business in-house.

This puts TPLs in a better position to negotiate better payment terms with shipping companies, and these cost benefits are eventually passed on to the companies that use their services. And another thing, 3PLs are better suited to handling the uncertainties (financial or otherwise) that typify this industry, which often require skills beyond what an in-house logistics team can handle.

Third-Party Logistics Companies Better Technology

A typical company has a lot of things to worry about besides logistics. For this reason, it can fall behind when it comes to keeping its logistics services up-to-date. But since logistics is all 3PLs deal with every day, they are better equipped technologically.

Today, they have at their disposal options like Transportation Management Systems (TMS), which help with a whole range of logistical needs. These include better shipment management, handling of complex scheduling, freight consolidation, and so forth.

Such a system would be too big of an investment for a company’s logistics department. In any case, most companies would not be in a position to fully exploit the whole range of benefits such advanced logistic management systems have to offer. Furthermore, such systems need to be managed properly and updated from time to time, which is a little more work a company can avoid by choosing to use a 3PLs provider.

3PLs are More Suited to Versatile Logistical Needs

Some companies have very diverse logistical needs. They may need to move things from distant and varied overseas destinations, or special products that need unique handling. Trying to do all this within the organization can prove hectic, expensive, and error-prone.

This makes the use of 3PLs the best option for them as these companies have a better reach and better skills and equipment to handle all kinds of transportation. Any organization that would choose to do this on its own would end up spending a fortune on logistics.

Justin Bright – CEO Brighter Logistics

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Brighter Logistics Shipping Made Speedy

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Transport Revolution: How Self-driving Trucks Affect Your Supply Chain

Recently Alphabet-owned Waymo announced that it was developing a self-driving semi-truck. This comes as no surprise as more automotive companies are thinking about introducing autonomous trucks. It will be interesting seeing a truck driver on a tablet or reading a book while their truck rolls along the highway, right? About eighteen states have already passed legislation related to self-driving vehicles. These states include Nevada, Alabama, California, Arkansas, Tennessee, North Dakota, Washington DC, Vermont, South Carolina, Utah, Texas, New York, Georgia, Florida, Pennsylvania, Louisiana, Colorado, and Michigan.

Self Driving Trucks

Autonomous trucks are revolutionizing a big industry in the American economy- the Supply Chain industry. The logistics industry employs over 1.7 million drivers, with trucking corporations experiencing an annual driver turnout of over 90%. The median truck driver’s age is a high 49 years old. With such a large number of truck drivers in the US, I can bet that you know a truck driver or a friend or relative who acquitted with one that is probably worried that the onset of self-driving trucks will drive them out of jobs, no pun intended. But will it? Flesh and blood truck drivers will be needed to maneuver the city streets, highway exits and to back up to the loading dock.

Autonomous trucks will make life easier for truck drivers by reducing the stress of long-haul driving, the primary source of fatigue for drivers.
Self-driving trucks will have a great impact on the Supply Chain and logistics industry. Here a few areas that you might notice shifting with the introduction of autonomous semi-trucks.

1. Road safety- Most people are concerned about computer-driven vehicles, but autonomous trucks will significantly improve highway safety by reducing driver error and fatigue from long-haul driving. People need not worry about accidents caused by distracted driving or human error when self-driving cars can travel over 700,000 miles accident-free.

2. Delivery speed- Experts predict that there’ll be increased speed in delivery due to a reduction in congestion and ability to cover longer distances in 24 hours. Moreover, trucking companies will be able to save maintenance costs, fuel consumption, emissions and vehicle downtime.

3. The cost of goods- We can expect reduced prices for products with autonomous trucks. Since transportation costs are a huge determinant of the cost of goods sold, most companies carry forward the costs to the consumers. With reduced transportation costs comes reduced prices.

4. Network design- Most organizations typically set the location of their distribution centers with the underlying assumption that trucks can’t cover more than 500 miles in a day. However, with the onset of autonomous trucks, the distance traveled is substantially increased. This will affect the size, number, and location of distribution centers. For example, an organization with five strategically placed distribution centers can shift to two large distribution centers that cover a larger geographic area.

Self-driving trucks technology will improve traffic efficiency and cut expenditure for organizations while reducing the cost of goods in marketplace. The trucks will still need flesh and blood drivers to maneuver the city and highway. So, if you know any truck drivers, you can tell them not to freak about this new revolution.

Justin Bright – CEO Brighter Logistics 

3 Surefire Strategies For Saving Money on LTL Shipments

LTL yields for carriers were up 2.4% in 2016 after revenue was down in 2015 due to a much softer market the past two years and newer challenges faced by carriers.

Pricing is expected to increase in 2017, and according to estimates from Stephens Inc., one can expect those numbers to be up from those of the last quarter by low single-digit increment rates.

Most LTL carriers are not flexible on their pricing models and while many shippers think they can save money by negotiating lower rates, there are more effective strategies to cut expenses on less-than-truckload (LTL) shipments.

Surefire Strategies To Save Money On LTL Shipments

As LTL pricing is set to increase further in 2017 due to fuel costs potentially going up too, shippers would be better off cutting trucking costs on LTL freight shipping by employing surefire cost-saving strategies. Some of the strategies proven to be effective include, being exact with packaging and palletizing the freight properly, considering consolidation, working with a 3PL and using better transport management systems.

Packaging and Palletizing

Aside from being accurate with measuring the weight and dimensions of shipments, proper packaging is a great way to ensure carriers can move your shipments safely and easily. Shippers who are palletizing their freight need to put boxes in upright position use slip sheet and stack the pallets in a way that protects the contents.

A major concern for shippers is that the condition of freight is undamaged at its destination. By making sure that pallets are packaged to increase strength and stability, these additional shipment charges that are often incurred can be avoided.

Here are some steps to take in packaging:

  • Shrink wrapping the shipment together with the pallet to avoid sliding
  • Maximizing the shipment’s density to allow stacking by carrier
  • Decking the freight with an extra layer to support stacked weight
  • Maximizing space by packaging pallets to the exact height and edge requirements specified

Consolidation

Consolidation of LTL shipments can significantly increase savings. It is a proven method for shippers to cut down on costs and decrease emissions while doing so.

Creating a system that ensures that shipments to the same location are consolidated into a single daily shipment, helps companies lower transportation costs and inventory while driving consistency and efficiency.

Load consolidation between different facilities and divisions can be achieved by forming a program or consortium that improves truckload utilization. Getting more people on board will increase shipment volumes and allow companies save money by converting LTL shipments to cost-effective full truckload shipments. More volume will also provide shippers with more leverage when negotiating a collective discount with carriers.

LTL Technology

Smaller companies that rely on untrained hands or one-person transportation/shipping departments, will find that working with a 3PL company will provide them with the LTL technology that they otherwise may not have access to.

Without logistics managers or well-trained employees, a small or mid-size business will save money on transportation costs by partnering with 3PL companies. Efficient management systems and better technology will streamline the LTL shipment process by providing shippers with assistance on rates, invoicing, carrier selections and most other aspects.

These systems will in turn decrease the inbound and outbound freight expenses for companies and reduce administrative costs by automating most of the processes involved with transporting LTL shipments.

Justin Bright – CEO Brighter Logistics