While we’re not completely out of the woods with COVID-19, there are many signs of life returning to pre-pandemic normalcy. A key question that logistics pros must consider is whether “normal” will look the same post-pandemic as it did before the virus. As your company finds its new normal, outsourcing logistics operations to a third-party logistics (3PL) provider can remove many of the current headaches you’re likely to encounter.
5 reasons to outsource logistics to a 3PL
3PLs can secure labor in a hyper-competitive market. Whether you’re looking for drivers or warehouse workers, they’re harder to attract, hire, and retain than ever. This is partly due to pandemic-related concerns over returning back to work, but mostly due to the heavy competition among companies that perform logistics services. This competition results in higher wages and more attractive benefits packages, making it difficult for small or mid-size operations to match the enticing offers that the big 3PLs and e-retailers can provide. When you partner with a 3PL for logistics services, the 3PL is responsible for all staffing and has many advantages in securing logistics labor that you likely do not have on your own.
3PLs can reduce your logistics costs. In addition to the increase in labor costs, warehousing space post-pandemic has become scarce and more expensive. 3PLs that offer shared warehousing models can help offset these expenses. With shared warehousing, you simply rent space in a 3PL warehouse alongside other companies doing the same. Your 3PL can provide more space and allocate more labor and resources to your operations when your volumes are high or when you want to increase inventory, and then reduce space and labor when they’re not necessary. You simply pay for what you need.
3PLs help you avoid technology investments. Technology investments that a modern supply chain requires come with a hefty price tag. These investments range from warehouse automation to sophisticated warehouse and transportation management systems. 3PLs already have these systems in place, allowing you to skip the cost of investing in them yourself. This is no small benefit as core systems, like a warehouse management system (WMS), can easily cost tens of thousands of dollars.
3PLs can provide – or coordinate – multiple logistics services. Once you decide to outsource logistics operations to a 3PL, management of the relationship requires time and resources on your end. Such management can become unwieldy if you need to manage multiple relationships for multiple service offerings. Some 3PLs can make life easier for you by offering multiple services in-house and/or managing other components for you. At Kanban Logistics, for example, we provide our core services such as warehousing, manufacturing logistics, and eCommerce fulfillment, and then either perform or outsource transportation services. Either way, you’re dealing only with one provider for multiple supply chain functions.
3PLs offer value-added services. In addition to core service offerings, many 3PLs can provide additional – or “value-added” – services such as:
- Product rework. Save time and money by working with a 3PL that can perform repackaging or reconfiguration of products within the warehouse.
- Vendor-managed inventory (VMI). With the VMI model, manufacturing suppliers work with 3PLs to store goods that the manufacturer will eventually require. When the materials are needed, the 3PL delivers just-intime (JIT) to the factory.
- Cross docking. With cross docking, goods are delivered to a 3PL loading dock for temporary storage or direct transfer to another truck.
- Foreign trade zone (FTZ) services. Goods stored in foreign trade zones are not subject to duties and taxes since they are considered outside of US Customs and Border Protection (CBP) territory.
Lean on Kanban Logistics for outsourced logistics services
Kanban Logistics is an ISO-certified 3PL provider with over one million square feet of warehouse space in Eastern North Carolina. We’re a trusted logistics partner to companies in the manufacturing, food, pharmaceutical, aerospace, automotive, import and retail industries. We provide a range of supply chain services including shared and dedicated warehousing, eCommerce fulfillment, manufacturing logistics services, drayage, and multiple value-added services. To learn more about how a 3PL can optimize your post-pandemic operations, contact Kanban today.