Working with a 3PL can sometimes be the solution to many of your business's logistics issues. Whether you deal with temperature-sensitive foods that need accurate and timely deliveries, or up-to-date tracking on goods that need to be transported internationally, a 3PL is likely to be your solution.
Generally, a 3PL specializes in transport, IT, storage, and eCommerce management. These areas and the level of service provided change between different providers as they specialize in different areas.
3PL transport entails multiple things. It can be last-mile transport for B2C operations, the transportation of products from a warehouse to a store, or simply moving products from one warehouse to another. This is often fulfilled by the 3PL's own fleet of trucks, vans, and vehicles to move the product. However, for jobs too small or far, a 3PL can create a relationship with big-name couriers and utilize special pricing to move their client's products with other companies' transport fleets.
Technology is a huge service offered by a 3PL. The technology provided can take the form of the 3PL’s own in-house technology or access to a licence provided by another company. This technology can give 3PL clients access to order portals, smart updates about their products, and additional behind-the-scenes applications such as warehouse management to improve efficiency by the 3PL.
Storage and warehousing are the third major service offered by most 3PLs. Warehousing can be for any business looking to work with a 3PL. Standard rates, pre-established space and security, and easy access are reasons why partnering with a 3PL for warehousing alone can be beneficial.
While the services offered by a 3PL can seem similar across competitors, the purpose and experience level fluctuate depending on what sector the 3PL is equipped for.
It is important to identify your industry, needs, goals, and “must haves” when researching a 3PL that can help you. There are three general industries that use 3PLs, and while they operate on the same basic principle, their facilities, knowledge and technology can be equipped differently.
Pharmaceutical companies are large users of 3PL companies. Often it is not possible for a pharmaceutical company to have its own fleet of vehicles and dedicated software, so the option to use a 3PL company is considered. However, pharmaceuticals require special attention in different areas than most. For example, if the 3PL is responsible for storage as well as transport, the pharmaceuticals must be stored in a facility that can house them at the correct temperature. This means larger refrigerated and frozen spaces compared to other industries.
Alongside temperature-controlled warehousing, transportation must follow the same strict parameter in order to not destroy hundreds of dollars worth of medicines. Adhering to temperature-sensitive guidelines on the road can be more challenging than in a stationary warehouse. This is why 3PL providers who deal with pharmaceutical companies use smart software and high-tech trucks to ensure the onboard products remain at a compliant temperature.
If you’re a food service manufacturer, this may sound ideal for your business's local ice cream products, and there could be some crossover with the applications of their services. However, the premiums and storage processes of specialized pharmaceutical warehouses would likely be unpractical.
Foodservice is similar to pharmaceuticals in the fact that often food requires the same cold chain compliance. However, 3PLs that work with food services industries usually have a greater split in their warehouse. It may be made up of about 40% freezer and refrigeration space and the remainder being ambient. This change in the layout compared to the above is due to the higher costs of running temperature-controlled space and the lower demand for it due to price compared to pharmaceuticals.
Generally, food service clients require some frozen space from a 3PL, but they require much more space when it comes to ambient. With ambient, you can stack higher and fill more space. This is because the operational costs on a 3PL to run ambient warehouse space are drastically smaller than frozen. Alongside the mix of temperature-regulated and ambient warehouse space, larger trucks are needed for transport as orders are generally larger. Larger trucks are also more beneficial as multiple stops are often required for food service deliveries as products usually go to more than one store location.
General goods storage and transport require much less than the temperature-sensitive needs of pharmaceuticals and food services. General good is a broad title with a large coverage area under its name. Typically it covers everything from food containers to machinery parts. General goods usually have minimal needs and can be stored in ambient spaces for long periods.
There are many benefits to working with a 3PL, especially when you find one specializing in your niche. There are four main reasons companies partner with a 3PL, these are the scalability they can provide, the access to tech, the in-house knowledge, and the ability for businesses to focus on their cores while the rest is handled.
When working with a 3PL that has great scalability, you will experience fewer roadblocks with your orders. This is because scalability works to remove these issues before they arise by delegating more or fewer resources toward the potential problem. For example, in order to keep your orders timely during an annual peak season, a good 3PL will understand this busy trend and delegate more resources to the areas of business that experience an influx of use. As a result, operations continue as normal with less chance of disruptions along the way.
Some of the technology made available through partnerships with a 3PL include:
GPS tracking allows tracking of vehicles used in the distribution stage of supply chains. This tracking can be used to combat issues such as miss-delivery or undelivered products, route planning, and driver error.
An inventory management system enables you to restock products into inventory as well as move products between zones and bins.
With customer order portals, you can offer your customers 24/7 ordering while freeing up your team.
Placing and managing your customers' orders can be a time-consuming process, where administrative mistakes can arise when customers relay their requests to your order management team.
Customer Order Portals are the ideal solution. They offer your customers a secure and personalized experience that’s easy to access.
To learn more about the technologies available when working with a 3PL, visit our blog
Being inexperienced in the supply chain space can lead to costly mistakes. The improper storage of goods and improper customer management can be common issues. Using a 3PL’s knowledge in whatever industry you are in, can help you reduce these risks.
Instead of starting in the industry alone, you start with access to their years of experience. The experience a 3PL brings to the table will help you make smart decisions and mitigate risk. To learn more about how knowledge can be a huge benefit of working with a 3PL, visit our previous blog.
Lastly, working with a 3PL allows business owners to focus on their core values and continue to build their name while the 3PL takes on the difficult work. This allows for the growth of your name or brand and enables you to gain new clients, all while the 3PL scales with you.
Finding a 3PL that works best for you isn’t always easy. It is important to understand the sector you are working within and which 3PL may work best for you. Alongside that, it is important to evaluate and compare their features and the associated costs. Whereas 3PL may have low monthly fees versus another, it may severely lack the facilities and staff available to pick, pack, move or transport your products.
Today, most 3PL providers have an online presence and ads on google, which allow them to be found easier, this method of searching online can be used to quickly find and talk to customer service departments of each 3PL and hear what they can offer. After making a basic list of providers around you, you can start to contrast your needs with each of them, and then each other.
Once you find a 3PL and are happy with the connections made, it is time to begin integrating with their systems. This entails syncing your product info and SKUs and training your staff on their technology and systems.
After that, the next major step is setting up delivery and receiving schedules to move your products.
The onboarding process can take up to several months to complete, but in the end, you will have a dedicated 3PL team to manage and support your needs and help grow your business.
Contact us today to learn more about Birkby’s comprehensive 3PL solutions.