Selecting the right third-party logistics (3PL) partner can have a significant impact on a business’s operations, providing services like warehousing, transportation, and distribution. With the global 3PL market worth $927.8 billion and expected to grow at a 7.5% CAGR from 2021 to 2028, choosing the right 3PL partner is more important than ever.
But first, let’s understand why outsourcing is important in logistics:
Outsourcing means collaborating with an external partner to manage either a portion or the entirety of supply chain and logistics operations. Recently, more and more companies are opting for outsourcing for the many benefits it provides. Outsourcing specific tasks within your supply chain can create a ripple effect that brings benefits to various aspects of your business. This phenomenon, known as peripheral optimization, is often overlooked but adds significant value to the outsourcing process.
Some advantages of outsourcing include, but are not limited to:
- Access to field experts
- Increased flexibility
- Improved risk management
- Reduction in indirect costs
- Better performance
Signs you need a 3PL partner:
- Customer growth is unmanageable
- Delays in order fulfillment
- Low morale within the organization
- Complex operations
- Expensive shipping costs
- Increase in customer complaints
Let’s determine the top 5 ways to select a 3PL partner:
- Determine your logistics needs: Before you start looking for a 3PL provider, you need to determine your logistics needs. Consider factors such as the type of goods you need to transport, the distance they need to travel, and any specific requirements you may have. This will help you narrow down your search and find a provider that can meet your specific needs.
- Assess their technology and capabilities: The right technology can make a big difference in the efficiency and accuracy of your logistics operations. Look for a provider that has invested in modern technology and has the capabilities to meet your specific requirements. This could include things like real-time tracking, automated inventory management, or predictive analytics.
- Evaluate their network and flexibility: A 3PL provider’s network of carriers and warehouses can have a big impact on your logistics management. Make sure their network aligns with your needs and that they have the flexibility to adapt to changes in your supply chain. You should also consider their scalability and ability to handle peak season demand or sudden spikes in orders. It is also crucial to understand their commitment and desire to fulfill your logistics needs.
- Holistic approach: Achieving visibility within the supply chain offers a comprehensive understanding of all the components involved. An optimal third-party logistics (3PL) provider should prioritize delivering value and enhancing operational efficiency, ultimately speeding up your processes.
- Tech and automation: We are currently experiencing the fourth industrial revolution, commonly referred to as Industry 4.0. By utilizing appropriate automation tools, 3PLs have the potential to enhance productivity and efficiency throughout the entire supply chain. This, in turn, leads to increased sales for the client and enables faster and more precise order fulfillment for the end customers.
Selecting the right 3PL partner can have a significant impact on a company’s operations. A 3PL provider can bring expertise, best practices, and an extensive network of key carrier partnerships to improve a company’s logistics functions.
Choose KSH for all your supply chain needs!
Our facilities operate on a plug-and-play model, providing our customers with tremendous flexibility. They are scalable, allowing clients to adjust to their projected demand. With advanced IT system support, we provide greater transparency in the supply chain. Additionally, we have an advanced Warehouse Management System in place, making reporting seamless.
Connect with our KSH Expert to know how we can take your supply chain to another level: snehil.singhai@kshlogistics.com