Does 3PL Save Money?

A 3PL provider saves money by reducing the financial strains of shipping goods.

They take care of your warehousing and transportation needs so you can meet customer demands while controlling costs.

This partnership is even more vital as your business grows and logistics needs become complex.

Keep reading the article to learn how 3PL providers can be your cost-effective partner.

How Can You Save Money with a Reputable 3PL Partner?

A 3PL partnership has several benefits. But its most important advantage is the ability to keep your operational costs down.

Here are some concrete examples.

1. Optimised Shipping

Logistics companies have large-sized delivery trucks with spacious trailers. These allow them to haul several freights in one load.

With ample trailer room, 3PL service providers can cut transportation costs and time.

Moreover, 3PLs typically have good working relations with private shippers. This business rapport comes in handy when negotiating shipping prices.

Consolidated shipping is another advantage of enlisting a 3PL provider. This strategy lets them combine the freight from various businesses in one shipment.

It gives you access to bulk rates and discounts, which you may not get when operating alone.

2. Minimised Facility, Equipment, and Labour Costs

Managing the supply chain yourself can be challenging. You need a fulfilment centre and people to run it.

Aside from the work and time involved, these requirements mean considerable upfront and overhead costs.

However, when you partner with a reliable 3PL company:

  • You won’t have to buy expensive equipment and trucks. They even take care of equipment updating and technical maintenance.
  • You can do away with staff hiring and training. A logistics company has employees to handle your fulfilment needs at a predictable cost. Also, you won’t have to hire extra staff come peak season – your 3PL partner can adjust your labour needs on demand.
  • You have access to flexible warehousing. An independent lease limits your storage space and locks you in a fixed payment setup. With a 3PL provider, you can match your warehouse needs with your business growth and peak times. This flexibility also lets you adjust storage costs and avoid shipping delays.
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3. Cost-Efficient Packaging

Packing goods, like cartons, air pillows, packing tape, labels, and pallets, for safe transport can be expensive. These may seem like little things, but they can add to your expenses quickly.

On the other hand, 3PL companies buy these packaging supplies in bulk. That means they can pass their savings from bulk purchasing to you. Plus, you won’t have to worry about packaging inventory.

Also, a 3PL partner helps you save money through their excellent packing strategy. Most parcel carriers use a factor called dimensional weight or DIM weight.

This unit measures the dimensions of a box to determine the weight of your package, its space requirements, and freight rate.

The good news is that 3PL companies know how to pack your products with the least amount of packaging. That way, you can minimise box space and save as much shipping cost as possible.

4. One-Stop-Shop Advantage

Communication is vital to business success, and you can easily keep things open when you only deal with one 3PL contact.

Third-party logistics companies offer a diverse range of services that your business needs. This unique feature means you don’t have to work with many vendors.

It is also easy to streamline processes, track inventory, and get timely customer support when needed.

All these benefits help you save time and money.

Also, one partnership means a consolidated invoice of your shipping expenses.

There is no need to waste time hunting down paper trails or emails to ensure things are in order. With one record to look at, you can quickly plan and maintain your budget, too.

5. Customer Loyalty

When your 3PL partner consistently delivers, your customers become happy and loyal.

Once your customers know that your shipping is always fast and convenient, they are more likely to order again or make larger purchases.

You won’t have to spend much on ads to encourage people to buy your products. Your reliable 3PL provider can indirectly help you with this goal.

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6. Continuous Business Growth

An increase in customer flow or sales is hard to predict. But when it happens, you want to be ready.

When you work with a 3PL company early on, you have a reliable partner to help you seize any opportunity.

Your 3PL already knows your business and can offer you better service options at a reasonable cost.

Third-party logistics providers are also constantly improving their operations. That means they can quickly adapt to your new business needs without the extra work on your end.

7. Smart Crisis Management

Similar to business growth, supply chain crises are also unpredictable. Bottlenecks, like port congestion, raw material delays, shortage of truck drivers, and soaring shipping costs, are also costly to navigate and overcome.

However, with a 3PL partner, you can keep the business going during difficult times.

Their vast logistics know-how and network of connections can help reduce shipping delays. They can offer customised and flexible warehousing solutions to mitigate risks.

Companies offering logistics services also use innovative technologies and artificial intelligence to improve demand forecasting and optimise shipping programs.

8. Tech-Driven Operations

Technology is now indispensable in any business. If you opt for in-house shipping, you’re in charge of purchasing and implementing IT processes.

While doable, it also requires learning, management, updating, and troubleshooting. On the other hand, 3PL companies already have the necessary technologies in place.

Aside from tools for efficient packing, storage, and shipping, their advanced platforms can generate metrics and real-time insights your customers need.

Access to numerical data can also help you assess and improve your operations. With a 3PL partner, you get access to extensive technology that can be too expensive for one business to afford and maintain.

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Achieve Cost-Efficiency with 3PL

Time is gold to any business. That means you lose money when you cannot quickly deliver goods, manage business needs, or implement new technology.

The solution is to distribute the workload to another expert. When you outsource your shipping and inventory requirements to a 3PL provider, you save money, ensure supply chain efficiency, and keep customers happy.

A 3PL partner can also help your business overcome challenges and grow steadily.

Moreover, you get more time to focus on other business tasks that need your attention.

If you think streamlining your fulfilment process can help you control costs, Effective Logistics is here to help. Call us on 03 8376 3300 or send an online enquiry through our contact form.

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