In today’s fast-paced marketplace, companies face complex supply chain and logistics challenges.
Your business may serve national or global customers, and it is in your best interest to find the most streamlined, efficient, and cost-effective way to fulfill each order. Many mid-sized to large companies reach a point where they can no longer manage this process internally, and they need a reliable partner to handle the details of supply chain and logistics, including warehousing, distribution, transportation, order fulfillment, packaging, shipping, and returns.
Third-party logistics (3PL) providers can be a valuable resource for companies that want to expand or stabilize their operations. Here are some of the pros and cons of outsourcing logistics to a 3PL partner.
Pros of 3PL Providers
Moving products where they need to go, when they need to be there is both a science and an art. If one link in the chain breaks, it can cause a massive disruption in your business operations. Working with a 3PL provider allows you to put a complicated process in the hands of experts who know how to solve any problems that arise. You can focus on what you do best, knowing that they have every aspect of logistics covered.
- Cost Savings
When you partner with a 3PL provider, you gain access to their considerable resources. Your business may not be able to invest in large warehousing space or transportation fleets or highly specialized staff – but a 3PL company already does. You can take advantage of these valuable resources without shouldering the burden of all the overhead costs.
Money isn’t the only thing your company can save by working with a 3PL company. You are also able to save time by using the streamlined processes the provider has already established for warehousing, shipping, and transporting orders.
Cons of 3PL Providers
- Large Initial Investment
While partnering with a 3PL provider can result in significant savings for your company over time, it does require a large upfront investment. For businesses that are struggling with cash flow, putting aside this capital can be an obstacle.
- Less Hands-On Control
Some companies are reluctant to cede control of their products and processes to a third party. They like having direct contact with their supply chain and logistics, and they worry that a 3PL provider won’t have the same accountability as in-house staff.
If your company is considering working with a 3PL provider, it’s important to make sure you’re financially ready for this big step. And it’s essential that you find the right partner to work with. Find a 3PL company that has long-term, successful relationships with clients – and that you can trust with your valuable business.
Learn why clients love working with Exegistics as a 3PL partner.