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How a 3PL Can Mitigate Stress During a Capacity Crunch

How a 3PL Can Mitigate Stress During a Capacity Crunch

Capacity crunches are nothing new. We see them every year, to a certain extent.

In 2017, Hurricane Harvey hit the Gulf Coast of Texas and Louisiana in late August, followed by Hurricane Irma in Florida on Sept. 10. Hurricane Maria followed on the heels of Irma and became the second major storm to slam into multiple Caribbean islands and Puerto Rico. The sheer size of these storms and the number of communities and businesses impacted by them created both short- and long-term transportation and logistics challenges. In 2018, the ELD (electronic logging device) mandate and an improved economy yielded a capacity crunch that led to increased costs.

Today, the ever-growing truck driver shortage combined with shipping capacity issues due to COVID-19, an unprecedented demand for essential goods, and the shifting peak seasons are all major factors contributing to higher freight shipping rates across the board (among other challenges). And as carriers rush to play catch-up, there’s an ever-increasing demand for trucks, which has led to a capacity shortage that’s further compounded by the other factors above.

What can you do to reduce the impact these factors have on your supply chain? Partner with a third-party logistics (3PL) provider.

How a 3PL Can Help You Overcome Capacity Crunches

Don’t deal with a capacity crunch alone. Partnering with a reputable and reliable 3PL provider can allow you to thrive in the present marketplace.

3PLs Have Networks of Qualified Freight Carriers

A company’s logistics spend is an accumulation of countless daily operations, with a common one being carrier selection. Identifying carriers for equipment, insurance, and qualifications is a huge undertaking. Before you hand your product over to a driver, you need to make sure they’re the right person or company to represent your organization.

Good 3PLs have a fully vetted network of qualified and reliable freight carriers. Because of their qualified networks, 3PLs can help you secure carriers that are most beneficial to you in terms of efficiencies and cost savings. You want a 3PL partner that will leverage carrier selection to meet your specific needs and build strategic partnerships that meet your growth goals.

3PLs Can Negotiate Improved Freight Shipping Rates

Climbing shipping rates are a direct result of a capacity crunch. 3PLs often have large and trusted networks, established relationships, and buying power in order to ensure more cost-effective solutions. 

While many smaller companies lack the necessary leverage to attain favorable negotiations, good 3PLs are able to leverage the combined shipping volume of their customers to obtain competitive rates with national, regional, and local carriers. 3PLs are experienced at negotiating freight prices and best positioned to monitor and make the most of fluctuations in the freight market, which can improve your company’s profitability.

3PLs Have Robust Transportation Management Software

Your business shipping may require customizable, technology solutions that can help to transact with carriers as well as pinpoint areas of inefficiency in your supply chain. Luckily, most 3PLs have their own proprietary transportation management software (TMS) that helps you manage and automate your company’s transportation processes. 

Working with a 3PL provider with a robust TMS can provide you with cost details, real-time alerts, key performance indicators (KPIs), reporting metrics, and seamless supply chain visibility into every order. Increased visibility ultimately leads to better decision-making. Additionally, visibility of real-time rates for multiple services, modes, and options afford the flexibility to optimize customer requirements and your bottom line.

3PLs Provide Continuous Optimization

Do all of your customers place orders in perfect truckload quantities? If not, the result can be less-than-truckload (LTL), underutilized truckload freight, or somewhere in between.

Many 3PLs have the technology available that allows a shipper to ship more efficiently. It may be consolidating products going to the same destination. Optimization provides shippers with cost savings by leveraging their 3PL’s vast client network, carrier relationships, and robust technology.

3PLs Offer Flexible Shipping Options

3PL companies have systems, networks, and processes put in place to effectively manage a wide range of different shipping modes, including truckload, LTL, and intermodal. This flexibility is beneficial because it allows shippers to take advantage of areas of capacity that they would normally be unaware of.

Strong 3PLs can not only consolidate shipments effectively but can identify the ideal transportation mode for a piece of freight. This results in both cost and time reductions.

Don’t Let a Capacity Crunch Cripple Your Business

ODW Logistics is the preferred 3PL partner for supply chains to help shippers get through challenging times in the freight market. We operate as an extension of your business to control costs throughout your supply chain that deliver you a competitive advantage over your competition.

Our team of experts is here to help you leverage their carrier relationships within the industry so that you find the capacity you need, when you need it, for the best rate. We take a strategic approach to logistics planning and find solutions to control costs and get your product to your customers as efficiently as possible. Our commitment to partnership and combination of technology, team, and process allows us to deliver on our promises.

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