Conventional wisdom says “don’t put all your eggs in one basket,” implying that it’s “risky” and “unnerving” to rely on just one solution. In the logistics industry, however, you can realize operational efficiencies and cost controls by working with one third party logistics (3PL) provider. Leaning on one 3PL to manage your supply chain ensures clear communication and seamless operation from one segment to the next.
In this blog, we’ll discuss the benefits of an integrated logistics services approach.
Why a 3PL Should Manage Your Entire Supply Chain
Many companies take a siloed approach to 3PL partnering for warehousing and distribution, e-commerce fulfillment, and transportation management services. The more 3PL companies you work with, however, the more likely you are to suffer gaps in your supply chain.
That’s why companies looking for peak efficiency often decide to partner with a single-source logistics provider. With an integrated approach, most, if not all, logistics services may be performed by a single provider, so long as that provider has the core competencies to handle all of these services proficiently.
By working with a single-source logistics services company, you may find greater efficiency and improved operational success. Here are some additional benefits of using one 3PL for integrated logistics services:
1. Integrated Providers Value Your Business
When you have different agreements with 3PL companies or transportation providers, you’re involved in a supplier-vendor relationship that involves a constant series of transactional interactions—each deal is separate from any other deal. When you opt for a single-source 3PL, you’re in an entirely different relationship that’s based on an ongoing partnership.
When you entrust your combined distribution operation to a single 3PL provider, you’re entrusting it with a good chunk of your business. A good 3PL company will go to great lengths to keep you happy over the long term, being mindful of the overarching strategies and goals of your business.
2. More Reliable and Available Data
Because all good 3PLs are in the business of data management these days, you can expect a higher level of data-management integrity from a single-source logistics partner. You can also expect data to be delivered in a single format that’s compatible with your own systems for easy access and analysis.
Accurate, standardized data not only gives you visibility into where your freight is or how different lanes are performing but also allows for better forecasting.
Even with basic tracking, it’s a pain to get separate data feeds from a dozen different providers, let alone analyze and make sense of it. It will almost certainly put a strain on your precious IT resources. With an integrated logistics partnership, you have one point of contact who’s going to help you understand what the next 12 or 18 months are going to look like and provide the data in a format that can be used for future decision-making within the network.
3. Multi-Client Consolidation Opportunities
In response to ever-changing customer expectations, shippers are seeking any potential method that may improve the speed-to-market and accuracy of their shipments—all while lowering costs as much as possible. To meet such demands, many shippers seek partners and alliances to consolidate their freight by combining LTL freight with other shippers, resulting in one shared truckload, rather than several small deliveries.
Through an LTL freight consolidation program, you can:
- Improve your customers’ satisfaction
- Increase consistency in your supply chain
- Take advantage of relationship synergies
- Achieve scale and cost savings
- Ship smarter and maintain your relationships
4. Better Flexibility
3PL companies have systems, networks, and processes in place to handle more work and accommodate a company’s growth. They have the resources available to make changes and improvements to each aspect of your supply chain.
A single-source logistics provider gives you the ability to scale space (if in a shared campus environment), labor, and transportation according to your needs. Businesses with seasonal periods no longer have to stress over industry ups and downs and can utilize more space and resources when needed. Furthermore, using a single 3PL allows your business to grow into new regions without barriers.
5. Reduced Risk of Damage, Loss, & Claims
When it comes to logistics, even the best-laid plans of smart shippers can be impacted by way of damage, loss, and claims. If a 3PL is delivering transportation at rock-bottom rates, the likelihood of poor service can greatly increase—they’re likely to take more risks with who they are hiring, or they will cut corners on other factors that play into making sure your cargo is handled safely and with care. They can get away with it, too, because if it doesn’t work out, there’s no dedication or partnership to jeopardize. They exit, and nothing is lost.
With an integrated logistics solution, your single-source provider is going to be deeply concerned with combining low cost with quality, safety, appropriate handling, and service. It’s all part of achieving the best mix of service and cost as your single-source partner who actually understands the strategy and requirements for how you are using your full supply chain.
A Comprehensive Transportation and Logistics Solution for Your Supply Chain
As a 3PL provider specializing in integrated logistics solutions, ODW Logistics helps companies make smarter choices about warehousing, e-commerce fulfillment, and transportation decisions so they can streamline costs and operate more efficiently.