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Why Outsource Transportation Management Functions to 3PL Providers?

Benefits of Outsourcing Transportation Management to 3PL Providers

Transportation management is a crucial function that helps maximize logistics performance for manufacturers, freight shippers, distribution companies, etc. Not only do transportation management systems (TMS) go well beyond just managing the cost of logistics, but also helps move freight from origin to destination in a reliable, cost-effective and efficient manner.

Transporting products to your customers on time is of prime importance, and you may face quite a few challenges if you want the transportation to be cost-effective, quick and reliable as well. Therefore, transportation management functions which cannot be managed in-house should be outsourced to service providers who can offer high-quality transportation services at competitive rates.

3PL Service Providers and their Growing Importance

In this constant battle for finding the best transportation service provider, some companies decide to outsource the complete transportation process, or a part of it, to third-party logistics (3PL) service providers. 3PL providers are slowly gaining visibility as more and more companies are deciding to outsource their transportation service processes to them and focus on their own core business operations.

One of the main reasons which makes companies opt for 3PL companies is cost reduction and ease of operations. Increasing freight volume and freight rates seem to be the other reasons why companies outsource their transportation management functions to 3PL companies. With a combination of large resource networks at various strategic locations, and intensely scalable and flexible services, 3PL providers help to manage your logistics as efficiently as possible. So much so, that 3PL companies are no longer considered external or "third" party. They are now looked upon as extended partners who can provide strategic solutions and help your business grow, by delivering a wide array of services such as transportation, supply chain management, logistics, etc. They are a one-stop-shop for your business where you can get all the work done related to your logistics and transportation operations, billing, delivery status, orders, etc.

Why Outsource Transportation Management to 3PL Service Providers?

Companies today want complete freedom from operations related to supply chain management. Be it infrastructure or technology, organizations are reluctant to bear the fixed costs involved in setting up transportation and supply chain operations in-house. This is where they leverage 3PL companies to carry out the work on their behalf.

Some of the many benefits of outsourcing transportation management to 3PL companies include -

  • Industry Experience and Contacts: 3PL service providers have a huge fleet of carriers which ensures reliable and timely delivery for their client. They also have good relationships with relevant industry bodies and can work out a cheaper rate for freight and fuel surcharges, based on successful negotiation
  • Continuous Improvement: 3PL companies aim at adding value to your business by continuously by finding ways to improve logistics operations and reduce costs wherever possible. They monitor, analyze, and optimize the processes related to transportation and logistics all the time, while adapting to the ever-evolving supply chain environment
  • Reduced Risks: When you do not follow the processes in the right manner, you run the risk of being subjected to fines and penalties. 3PL service providers help you evade this risk by completely owning the responsibility of following the correct processes. Even in the instance of a lost, damaged or stolen shipment, 3PL companies claim full responsibility and make sure you do not suffer due to such unforeseen instances
  • Better Price and Peace of Mind: Businesses can leverage the experience and expertise of 3PL service providers, resulting in significant saving of time and money. By using a combination of high-quality software and reliable logistics resources, 3PL providers also helps in better consignment reporting for overall peace of mind
  • Playing the Technology Wave: 3PL companies use the latest technology to track shipments and also perform other necessary functions. For example, TMS (transportation management system) software used by 3PL providers help to provide better insights into where your shipment is at a given point of time. You benefit from load consolidation and a more optimized routing and distribution system when you are able to track your goods correctly
  • More Control: Contrary to what it may seem, by outsourcing your logistics and shipment requirements to a 3PL service provider, you actually gain more control over your logistics operations. 3PL companies are accountable for your shipment and give you full clarity and visibility into where it is at a given point of time. They provide real-time information in the form of reports and dashboards that contain metrics that matter to you. This helps eliminate all inefficient processes and improves profitability

3PLs - Bridging the Gap between Efficient Logistics and Operational Benefits

Research shows that many companies today are outsourcing their domestic and international transportation and logistics operations to 3PL service providers. Globalization of course, is one of the major drivers behind this trend. At the same time, it can't be denied that 3PL companies are well-equipped to execute and manage your company's logistics and transportation business using the latest technology and best available resources and processes.

By working with a 3PL service provider you get to stay up-to-date with the latest developments in the industry. You also get to connect with the extended network of people who work with 3PL companies. Your 3PL service provider is well-versed with the mandatory regulations that need to be complied with and hence gives you an edge over your competitors in the market.

Share your Logistics Requirements with Outsource2india Today!

At O2I, we understand that no two businesses share identical operational goals. That is why we are ready to develop innovative and extremely scalable logistics solutions to meet your specific business requirements. With a wide portfolio of logistics management services under our belt, we can help you arrive at cost-effective solutions for all your assembly, warehousing, packaging, and distribution needs.

Contact us today to outsource transport management functions and learn how we can help you maximize your supply chain's inherent potential!

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