3PL Outsourcing, A 5 Point Summary

According to the CSCMP State of Logistics Report, third-party logistics providers (3PLs) have become an important asset to manufacturers and companies that have experienced severe disruptions in warehousing and transportation during the pandemic.

A 3PL provides a variety of logistics-related services including transportation, distribution, warehousing, value-added or fulfillment services. A 3PL receives customer’s products in a warehouse using their own equipment and employees. Or they can manage the operations from within a customer’s facility, known as contract warehousing.  

As outsourcing 3PL services becomes more essential to our economy, Evans Distribution Systems outlines the most important advantages to partnering with a 3PL provider.

1. Key Objectives to Outsourcing

Customers generally have specific outsourcing objectives when seeking a 3PL solution. The five most common objectives are:

  • Flexibility (short-term, longer-term scalability)
  • Optimized operational performance and technology
  • Access to resources (labor, material handling equipment, technology)
  • Extended reach to various parts of the country
  • Reduced costs

In-house warehousing can turn into a significant operational expense for manufacturers. A 3PL provides its customers all the operational and technological advantages to optimize its supply chain. With expertise and equipment in place, a manufacturer relies on the partnership to ensure there are no disruptions.

2. 3PL Advantages

Today, 3PLs have expanded their service offerings to become an end-to-end solution provider for a variety of customers. Their knowledge and expertise optimizes a customer’s supply chain. The advantages of working with a 3PL include:

  • Access to innovative solutions to optimize supply chain processes and overcome challenges.
  • Relationships with knowledgeable industry partners such as freight forwarders, customs brokers, packaging manufacturers and software engineers are highly valuable.
  • Communication from dedicated account managers on reporting of inventory levels, transportation routing and receiving/shipment info.
  • Improved performance from management software and inventory data provide real-time metrics that customers may have difficulty tracking on their own.

3. Cost Benefits of a 3PL

3PL’s are the experts in logistics and have the relationships and infrastructure in place to efficiently manage product and costs on a micro-level. Optimized performance reduces discrepancies in labeling, transportation, inventory management, and order processing. Reduced issues equate to less claims and lower costs. Other cost benefits include:

  • Accessible on-hand inventory; faster order processing.
  • Increased capacity in key areas; reduced shipping fees.
  • Operational efficiencies; less unexpected fees.
  • Improved customer service; more eyes on the process.
  • Enhanced technology provides automated operations.
  • Increased security and safety measures with qualified labor.

4. Warehouse Operational Benefits

When it comes to warehousing operations, there are several key benefits to working with a 3PL.

  • System integrations—a warehouse management system can fully integrate with your order processing software, thereby reducing the need for manual orders.
  • Inventory management—3PLs provide monthly and daily inventory reports for customers. A 3PL has full coverage of on-hand inventory down to the SKU level.
  • Customized solutions—customers provide the warehouse managers specific work instructions for handling and storing products. This includes loading and unloading instructions, process-related instructions, storage requirements, temperature restrictions and much more.
  • Labor management—during times of high turnover, 3PLs have resources to recruit and retain the most qualified labor. Associates are trained on specific account requirements and safety measures.
  • Value-added services—3PLs do not have a one-size-fits-all customer and have expanded into offering unique value-added services. This includes repacking, co-packing, kitting, bundling, custom packaging, inspection, testing, and more.
  • Certifications—many 3PLs, like Evans Distribution Systems, have acquired certifications that allow them to provide more offerings to a variety of customers. These include liquor licensing, food-grade certification, and ISO 2015:9001 certification. We also have Foreign Trade Zone and bonded warehousing for imported goods.

5. Transportation Operational Benefits

On the transportation side, a 3PL is a reliable partner to ensure your goods are delivered on time and undamaged.

  • Asset-based transportation—Evans Distribution Systems provides customers with an in-house asset-based transportation solution for local and regional shipments. These are usually dedicated routes for customers who are repeatedly shipping materials to the same place.
  • Non-asset-based transportation—For over-the-road or quick turnaround shipments, Evans Distribution Systems provides a brokered solution to handle every aspect of the shipment and documentation.
  • Transportation technology—3PLs use a transportation management system to track shipments, optimize routing and maintain proper documentation. Drivers are equipped with tablets, cameras, and tracking devices to maintain load visibility.
  • Qualified drivers—To ensure a safe and damage-free shipment, 3PLs recruit drivers that have CDL-A licensing, optimal safety records, and several years of experience on the road.

An outsourced 3PL solution gives customers the freedom to focus on their core operations while having a strong supply chain system. There are many benefits to working with a professional 3PL like Evans Distribution Systems.

If you’re interested in connecting with a 3PL expert, please contact us.