Let’s take a moment to look at some of the advantages that come with outsourcing part or all of your supply chain and fulfillment services to a unified multi-mode 3PL solution.
1. Workflow Simplification
The first and maybe most obvious advantage to working with a great 3PL provider is the simplicity it offers. Rather than coordinating with multiple individuals at different companies, each with their own regulations, policies, and agendas, you handle all communication through a single organization.
Communication between your drayage operator and your freight carrier will never be smoother than when they are one and the same. With a single provider, you can forget about miscommunication or confusion at the port, and rest easy knowing all your cargo is flowing smoothly from the ship to the warehouse, and then on to its final destination as needed.
A completely unified fulfillment system offers unparalleled accountability from your provider, as well as total control over all stages of the process. A great 3PL provider will also give you the flexibility, information, and tool set to use that control to keep costs and time-to-shelf as low as possible.
2. Increased Flexibility
Speaking of inter-modalism, choosing to transload your freight opens you up to a world of logistics options that can make the fulfillment of diverse orders run more smoothly.
Tom Waskiewicz, director of rail transportation for Corn Products International, toldInbound Logistics, “Transloading is a major distribution channel for us; it allows us to reach every major U.S. market with competitive service and pricing.”
Thanks to increased transparency, “the shipper, rail and truck carriers, and transloading operators have access to more information on each leg of the distribution channel,” says Waskiewicz.
By deconsolidating your cargo with your transloader, you can repack more efficiently for road transport,e.g. three maritime 40 foot containers into two 53 foot domestic containers. But repacking whole shipments is just the tip of the deconsolidation iceberg.
Many 3PL companies that provide transloading now offer some form ofdeconsolidation fulfillment–warehousing your products after unpacking them–so that goods can be shipped to your distribution centers, or directly to your retailers, on an as needed, on-demand basis.
3. Cost Savings
The costs associated with maintaining warehouses, workers, and equipment — all the physical and people infrastructure you need to ensure fulfillment can be removed from your ledger when you choose to outsource fulfillment to a 3PL provider.
By deconsolidating your cargo with a 3PL provider near or even at the port of entry and then relying on that same provider for fulfillment on an as-needed basis means you can eliminate the need to maintain enough warehouse space to store your entire stock of inventory.
Working with a third-party provider reduced overall logistics costs by 9% and offered an average fixed logistics cost reduction of 15% for respondents to the2015 Third-Party Logistics Study.
For example, here atGlobeCon we have over 150,000 sq. ft. of intelligently designed warehouse space immediately adjacent to the Port of Los Angeles. The warehouse space was built to suit the needs of the 21st century–facilitating increased velocity and adaptability
across the floorplan and parking lot–and includes additional truck loading space, state-of-the art WMS, and eCommerce friendly in-and-out capabilities to efficiently manage theitem-level fulfillment trends sweeping the industry.
It goes without saying that this in turns leads to a better margin overall, allowing top BCOs to remain competitive with regards to pricing in order to maintain their retail edge.
4. More Comprehensive Business Intelligence
Consolidating your supply chain with a 3PL provider leads to a natural consolidation of your supply chain data. This, of course, opens the door to a more complete understanding of your organization’s logistical world via detailed reporting.
Imagine the valuable insight you could glean from monitoring your supply chain in one digital environment–from import to point of sale. A 3PL partner worth their weight will offer a WMS that integrates with your own inventory management system, as well as any proprietary business software you use to manage your supply, fulfillment, and sales data so that you’re able to see the forest and the trees.
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.