As a brand, you have many responsibilities, one of which is to ensure your products get delivered to their intended destination, whether it's to a warehouse, a store, or directly to the end customer. To achieve this, brands can either handle their logistics internally or outsource to a third-party logistics (3PL) company. In this post, we will explore how switching to a 3PL can save a brand money.
Reduced Infrastructure Costs
Logistics operations require significant investments in equipment, technology, and resources to run efficiently. This includes buying or leasing trucks, warehouses, and tracking systems. By outsourcing logistics to a 3PL, brands eliminate the need for these expenses, saving them a considerable amount of money.
Leverage 3PL Network
A 3PL company has an extensive network of carriers, warehouses, and other logistics providers that brands can leverage to reduce transportation costs. The 3PL can negotiate better rates with carriers and use their network to find the best routes for delivery. Additionally, the 3PL can provide the brand access to multiple warehouses to reduce transportation costs by enabling faster deliveries and lowering inventory holding costs.
Increased Efficiency
Managing logistics operations internally can be time-consuming and could pull brands away from focusing on their core activities. A 3PL company allows businesses to concentrate on their core competencies, such as product development and marketing, while keeping their logistics operations running smoothly. These services can include warehousing, order fulfilment, inventory management, and transportation management. As a result, the brand's logistics operations become more efficient, reducing operating expenses and increasing revenue.
Reduced Labour Costs
Managing the logistics process internally means having to hire and manage additional staff to handle the work. Outsourcing to a 3PL eliminates this requirement and reduces the associated labour costs. The 3PL will handle all logistics operations, including hiring, training, and managing staff, thus allowing brands to focus on growing their core business areas.
Summary
Switching to a 3PL can help brands save money by eliminating the significant investment required for infrastructure, leveraging the 3PL's carrier network to reduce transportation costs, improving operational efficiencies, and reducing labour expenses. In addition, partnering with a 3PL can bring other benefits such as increased scalability, improved supply chain visibility, and better customer service. Overall, outsourcing logistics is a cost-effective solution that can generate substantial returns by streamlining operations and letting brands focus on driving growth.
