When Is The Right Time To Engage With A Managed Logistics 3PL

You landed the Wal-Mart account! Now what? The Retail-Supplier Relationship
Author PhotoBlueGrace Logistics - March 9, 2021
Shipping challenges are greater than ever this year. The COVID-19 pandemic accelerated already existing trends among customer expectations, it upset accurate forecasting in capacity, closed borders and redirected the flow of goods. Even companies that were well-positioned in their sector felt the tides change in 2020. The steel resolve of shippers is to be admired, but is sheltering in place with existing reaction-based tactics the smartest way to weather this storm? It’s been a year of challenges from every angle. What circumstances is your business experiencing that warrant outsourcing tasks to a 3PL?

An Exponential Increase in Orders

Growth is always the goal of every business. Increased contracts should equal increased profits. But when that growth outpaces the current abilities of an existing supply chain, it’s time to call a 3PL. Timeliness is key. Massive failures can permanently damage business relationships, tarnish a professional reputation and lose customers. It can even cause the entire business to fail. The sooner help is called, the fewer losses there are while recovering from the unexpected boom.

Tight Budget Margins

If you’re experiencing a tight budget but can’t find any fat to trim, a 3PL may not seem like a necessary expense. However, with their many connections and ability to consolidate the needs of their clients, they have the power to negotiate larger savings than individual shippers can manage on their own.

The Need For Improved Customer Service

Customer expectations have been trending towards same-day and next-day shipping under the Amazon Effect. Shoppers also expect transparency and 24/7 customer service. COVID-19 accelerated these trends as households turned to e-commerce for their daily goods. Customers aren’t aware of the many obstacles that exist in freight because of the pandemic, they only know that they’re suddenly very anxious about why the toilet paper is taking so long to arrive. If your customers are canceling orders, demanding refunds and complaining about package tracking, it’s time to let a 3PL come in and smooth things over.

Just Starting Out

If your company is wet behind the ears, there’s a lot to learn. This is the most formative time in creating core business initiatives and making a name for oneself. New shippers can quickly find they have too many irons in the fire. Taking advantage of a 3PLs existing distribution networks and warehouses is a smart way to get profits rolling before making large investments to handle these operations internally. Outsource these challenges and focus on establishing your company.

What to do in Uncertain Times

2020 was an unpredictable year and the ripple effects of this are carrying into 2021. 3PLs mitigate risks by taking responsibility for contingency plans. They also offer protection against lost or damaged goods. Additionally, if your company finds itself repeatedly in a capacity crunch or recording inaccurate inventories, there’s a huge cost benefit to letting the professionals identify and ameliorate the core issues at play.

Transporting Perishables

Shipping delays due to capacity constraints, detention, dynamic border regulation, container and labor shortages, sanitization slow-downs and several other pandemic-related supply chain disruptions have been a terrible feedback loop resulting in lost profits. Perishables are a difficult freight to move. As we’ve mentioned before, “If even one of the transport requirements of perishables is not met, the goods can become unfit for consumption or further processing.” If your company transports perishables or the COVID-19 vaccines, ensure this does not happen by enlisting the help of an experienced 3PL.

Operating In International Markets

Entering into international markets can be challenging to organize. But even shippers established in this market are dealing with surprises related to border closures and regulation changes from COVID-19. If you find yourself experiencing costly shipment delays, letting a 3PL handle customs, documentation, duties and developments at various borders is a timely investment.

Are You Looking to Expand?

Using a 3PL takes the guesswork out of establishing a presence in a new region. Access to distribution centers, local labor forces, warehouses, scalability, established tech systems for transparency and inventory management is a cost-effective way to make an entrance into new territories. Whether your company lacks internal resources or finds that the ones it already has are not enough to keep up with the current events, 3PLs are a worthy consideration.

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