The onset of globalization and advancement in logistics technology has increased customer expectations related to product delivery. Since inventory tracking and product safety has become an intrinsic part of the supply chain, customers expect deliveries to reach safely within the expected time frame. However, everything doesn’t always go according to plans.
The recent outbreak of COVID-19 is a perfect example of the challenges faced by transportation and warehouse companies. At the height of the pandemic, hundreds of sea routes, flights, and trainloads were canceled. Freight companies faced bottlenecks due to lack of transport. The staff shortage and social distancing rules meant that thousands of containers were stranded at the port.
As everything went haywire, a small portion of business owners prevailed because they used 3PL services to manage their supply chain. 3PL is a term used for third-party logistics. Using third-party logistics, business owners can outsource distribution, warehouse, and fulfillment to 3PL providers. It helps businesses save costs and time.
What is 3PL?
3PL, third-party logistics, help businesses distribute goods and inventory in a streamlined and effective manner. Business owners save time and cost by benefiting from the preferred relationships of 3PL providers with freight carriers, customs, and other suppliers.
3PL companies also serve warehouse managers. This is why several storage facilities use 3PL companies to move goods around the world. Using 3PL logistics software, warehouse managers can easily reroute their consignments based on the best available route and carrier rates.
3PL is a win-win situation for business owners and storage facilities. Business owners can manage the supply chain by outsourcing their fulfillment and distribution needs. Similarly, warehouse managers can ensure the delivery takes less time to deliver.
When Should You Hire a 3PL?
If your team is overwhelmed by customer orders and it is becoming increasingly difficult to maintain the supply chain, try to outsource business operations to a 3PL service provider. Outsourcing important business tasks can help cut down on unnecessary costs and improve customer service.
Business owners should also consider hiring a 3PL provider if there is a sudden increase in transportation expenses. These transportation costs can increase quickly because it is common for business owners to rely only on a single freight carrier. Under certain circumstances, overdependence on one carrier can increase the cost and cause major delays.
Another reason to hire a 3PL is an increase in the number of complaints related to delivery. Most customer complaints are the result of unnecessary delays and wrong orders. Under these circumstances, both business owners and warehouse managers can benefit by outsourcing some of their core business tasks to the 3PL company.
Types of 3PLs Providers
Services offered by 3PL providers can differ based on the focus area. 3PL providers specialize in one or two areas, which usually include transportation, fulfillment, and finance. Here are the three district categories of 3PL companies:
- Fulfillment & Distribution: This is the most common type of 3PL company, which primarily serves e-commerce businesses. Business owners can use them to store and deliver orders at a lower cost. Some of these 3PL companies also offer customer service and take care of customer returns.
- Transportation: Warehouse managers and business owners can partner with 3PL transportation companies to save costs on shipment. The extensive network of these transportation companies and their contacts at ports help clients save both time and money. USPS, UPS, and FedEx offer such 3PL transportation services.
- Financial: Large companies and warehouse facilities often outsource their finances to 3PL providers. The financial 3PL model mainly constitutes cost control and accounting. It is suitable for businesses and warehouse facilities that require freight forwarding, inventory tracking, and bank financing.
What are the benefits of using 3PLs software?
3PL software solutions are integral to managing warehouse operations and distribution channels. Depending on the requirement, warehouse managers can control almost every aspect of the supply chain from start to finish.
Here is why you should consider integrating 3PL software into your existing setup:
- Business owners and warehouse managers can receive live quotes from several freight carriers and automatically dispatch the inventory according to a preset preference.
- The 3PL system can proactively communicate with multiple logistics providers to pull tracking information as soon as it becomes available.
- Managers can use the software to spread their inventory across different storage locations to speed up the delivery process.
- Using the app, businesses can balance the demand by keeping track of total orders and packets in transit. This will prevent committing excess capital to the supply chain.
- The 3PL software can assist in rerouting orders to specific distribution channels and fulfill orders as quickly as possible.
- Automating the supply chain will lead to fewer errors and improved customer service.
Important Things to Consider When Choosing Right Fulfillment Partner
Before selecting a 3PL software, it is important to evaluate your business needs. The easiest way to analyze the situation is by understanding the different types of logistics software solutions.
Standalone Warehouse Management System is a type of 3PL shipping logistics software, which is designed to cater to warehouse operations. The software helps maximize the storage and streamline the workflow. It can also generate packing lists, send shipping notifications, and offer RFID support among many other functions.
Enterprise Resource Planning System is suited to large organizations interested in running their business across different modules. The different types of modules generally include inventory management, fulfillment, distribution, accounting, human resource, and customer service. Each module runs independently and interacts with the master module to process relevant data.
Integrated Supply Chain Management Suite is designed to manage the supply chain from start to finish. It is particularly helpful in tracking the flow of a product as it moves from production to the end consumer. The system includes multiple software tools to provide better visibility and decrease operational costs.
In reality, most 3PL solutions are a combination of all the three applications discussed above. Therefore, it helps to get a customized solution according to your specific requirements. Chetu offers such shipping logistics software development services.
Chetu’s development team has years of experience in creating effective 3PL warehouse software that can easily integrate into the existing supply chain and warehouse. The customized product can handle every aspect of the business cycle from manufacturer order processing and inventory management to order tracking.
It is the right time to say goodbye to supply chain troubles and use 3PL technology to streamline business operations in a global pandemic.
Editorial Staff at Technical is Technical is a team of tech writers. We aim to make technical pieces of stuff easier for our tech and non-tech readers. We provide insights on tech news, smart gadgets, and emerging technologies.
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