Imagine you are the Director of Logistics for a major regional retailer charged with 20 stores spread across six states. The majority of the goods you stock and sell arrive from manufacturers in Asia at the port of Los Angeles, and you own and operate six warehouses, one in each of the states in which you have retail locations.
Your freight is moved from the port to your freight forwarder by a large drayage operator that your freight forwarder prefers to work with. Once unloaded, your freight is moved across the country and into the regional warehouses by a freight forwarding service that only offers port-to-warehouse shipping, with no flexible cross-docking or deconsolidation options.
So if your inventory needs change you have to wait until the material arrives at its original destination before you can re-route some part of the shipment elsewhere.
You live in a one-size-fits-all universe where there’s no ability to expedite, change mode, or reactively adjust to the volatile needs of your stores in the moment.
At your warehouses, nothing is integrated particularly well electronically, and you have almost 100 warehouse employees in six states. Every facility is outfitted with office equipment, you own a fleet of forklifts and other equipment that requires constant maintenance.
These six seemingly-crucial warehouse facilities add work for your HR and IT teams, not to mention they require fairly intensive oversight from your corporate office in order to stay on-track and run as efficiently as possible. But how efficient can they be?
According to a recent study, only 30% of warehouses in the U.S. are operating efficiently.
The Move to Outsourcing
So, how can third-party logistics providers help with any of these problems? What is it about their unique position in the fulfillment chain that makes them so well suited to help make things more efficiently and cost-effectively for their clients?
The answer lies partly with new-school technology and partly with old-school infrastructure, but maybe the true advantage is the way the best 3PL companies are able to combine the two.
Put in the most simple terms, a good 3PL partner is a one-stop shop for everything your organization requires from drayage to order fulfillment. Because everything is handled by one firm, inventory tracking becomes much less complicated, providing you better access to the information you need to make on-the-fly operational decisions.
A great 3PL firm can offer you real-time tracking of your cargo, a strong and intuitive warehouse management system (WMS), and quick turnaround on fulfillment all in one place.
“Today’s logisticians are managing their supply chains more intelligently,” said vice president of client solutions at Tailored Services Scott Weiss when talking with the Journal of Commerce last year.
Managing supply chains intelligently means that logistics managers are taking the time to consider alternatives to the traditional approach. By integrating new technologies, they’re discovering lightweight solutions that provide more flexible ways to ensure their cargo is moving quickly with as little expense as possible.
The four main advantages to bundled outsourcing include: workflow simplification, increased flexibility, cost savings, and more comprehensive business intelligence.
If you’re a logistics manager and need a partner to help you strategically manage and successfully move your products out of the port and onto their final destination, feel free to reach out to us to discuss your needs.
And for detailed information, maps, and contact information for the ports of Los Angeles and Long Beach, be sure to download a free copy of our Comprehensive Port Service Guide.