5 Reasons to Use a 3PL Provider

When companies experience growth, they often run into challenges meeting the demand of their supply chains. On the opposite end of the spectrum, large companies need more time to focus on their core competencies. Whether it’s assembly needs, inventory management and storage, contract packaging, or shipping, most companies can benefit from having some additional help.

This is where a third party logistics (3PL) provider comes in handy.

3PL providers offer custom solutions that meet your specific needs for assembly, packaging, warehousing, and onsite integration. A good 3PL provider has thorough knowledge in logistics and an array of resources to help identify and fill in any noticeable gaps that a company might have.

Depending on what your specific needs and goals are, 3PL providers can offer a variety of benefits.

Save Time and Money

Being more efficient in terms of time and money is a major benefit that 3PL providers can offer to organizations. By not having to spend money on building warehousing, hiring additional labor, facilitating transportation, and installing various technologies, companies can reduce their costs drastically, while simultaneously freeing up more time to focus on core business initiatives.

3PL providers not only save companies time and money in the short term, but in the long term as well. Additionally, 3PLs also eliminate the hassle of paperwork, billing, audits, training, staffing, and optimization that are typically involved with supply chains.

Market Expansion 

One of the advantages of working with a 3PL provider is the ability to easily position your supply chain in markets where you don’t have an established presence. Having access to distribution centers and warehouses in various regions allows companies to grow in new areas by being able to ship goods efficiently to anywhere in the world.

Being able to locate and keep track of products and inventory in a new market without having to spend money on warehousing, equipment, and additional labor can save companies money while giving them the opportunity to strategically position themselves to better serve their customers.

Resource Network 

Third party logistics providers have a vast resource network available that provides advantages over in-house supply chains. With access to a 3PL provider network, supply chains can be expanded quickly, efficiently, and in a cost-effective manner. The relationships that many 3PL providers have with those in their network can open up opportunities for companies to receive volume discounts, lower overhead costs, and timelier service.

Scalability and Flexibility 

Depending on what your needs are, 3PL providers have the ability to scale space, labor, and transportation based on the fluctuation of your inventory. Whether you’re dealing with seasonal inventory or new product releases, 3PLs can help provide adequate space and resources between your busy and slow times, giving you maximum amounts of flexibility during any time of the year.

Continuous Optimization

As with any business, ensuring the happiness of your customers is crucial to success. Many in-house supply chains can become overwhelmed by the amount of work they have to accomplish with limited resources. By partnering with a 3PL provider, manufacturers can ensure the happiness of their customers by offering faster delivery times and more accurate order fulfillment.

Choose an Experienced 3PL Provider

Many companies think they can save money and handle supply chain needs on their own, but that oftentimes isn’t feasible. Companies would actually save more money and become more efficient with their supply chains by partnering with an experienced 3PL provider with an extensive network of resources and warehousing locations.

If you’re looking for an experienced, dependable 3PL provider to handle all of your supply chain needs, contact the Derby team for more information.