Warehousing services are a key component of virtually any business that handles a physical product, but it takes time and money if you choose to manage the function internally. Fortunately, outsourcing warehouse services to a Third-Party Logistics (3PL) provider can offer substantial cost-saving benefits for your company.
5 Ways a Warehousing 3PL Can Save You Money
Reduce people costs
Labor is one of your largest logistics expenses. The average salary of a Logistics Manager in the US is currently $76,301. There are also costs related to benefits, training, insurance, and technology to consider. When you look at the all-in costs for staffing your own warehousing operation — executives, managers, and associates as well as all the time and money spent to attract, hire and retain their services — the burden on your company’s overhead is significant. 3PLs specialize in logistics labor management and can significantly reduce your direct and indirect labor expenses.
Reduce infrastructure costs
Traditional warehousing requires significant upfront investments in infrastructure, including building or leasing storage facilities, implementing technology systems, and hiring and training staff. By outsourcing to a 3PL, you can eliminate or significantly reduce these initial capital expenditures. The 3PL provider already has the infrastructure in place, allowing you to leverage their facilities and technology without the need for substantial upfront investments.
Avoid technology investments
3PL providers often invest in state-of-the-art technology and warehouse management systems (WMS) to enhance their operational efficiency. By leveraging their technological infrastructure, your company can benefit from real-time visibility, accurate inventory tracking, and efficient order fulfillment processes. This can lead to a reduction in errors, improved order accuracy, and streamlined operations, ultimately saving money by minimizing costly mistakes and improving overall supply chain performance.
Due to the seasonality of many products, companies that do handle their own logistics and fulfillment struggle to right-size the infrastructure and staff for the operation. 3PLs, on the other hand, can more easily flex labor across many customers. Shared warehousing services enable you to share space in a 3PL’s warehouse alongside other “tenants.” Instead of the large overhead associated with the DIY and contract warehouse models, you simply pay only for the space and services you require. Your 3PL can accommodate any shifts in space or resource requirements – effectively scaling your footprint to your needs as they change over time.
Focus on core competencies
Outsourcing warehousing functions to a 3PL allows your company to concentrate on its core competencies, such as product development, marketing, and customer service. By entrusting logistics to experts, you can improve overall business efficiency. This focus on core functions can lead to increased productivity, innovation, and revenue generation, indirectly contributing to cost savings and enhanced competitiveness in your industry.
Outsource East Coast Warehousing Services to Kanban Logistics
If you’re really looking to save money on your warehousing operations while still enjoying a competitive advantage in the marketplace, outsourcing warehouse services to a North Carolina 3PL may be your best bet. North Carolina is routinely ranked as the Best State for Business in the US. Its low costs and high business friendliness are key reasons why.
North Carolina sits in the middle of the East Coast, midway between Miami and Boston, with easy access to several vital interstate highways like I-95, I-85, and I-40. It contains multiple freight rail systems and is also home to seaports in Wilmington and Morehead City as well as two inland ports. The Port of Virginia in Norfolk is also accessible to much of Eastern North Carolina.
If you’re ready to talk about saving money and utilizing the robust supply chain infrastructure of the Tar Heel State, be sure to contact Kanban Logistics. We offer 2 million square feet of warehouse space – including temp- and climate-controlled space – in an ideal location designed to speed your products to market.