How The Largest Third Party Logistics Companies Facilitating Globally?
Hello friends how are you all? Today we are going to talk about the How The Largest Third Party Logistics Companies Facilitating Globally? The global retail industry has taken a massive hit because of the pandemic, social distancing regulations, unexpected lockdowns, and closed borders. Online orders have gone through the roof. Global Third party logistics companies suffered during the first few months of the pandemic. But, despite these unexpected challenges, ‘3PLs’ emerged as critical businesses in the following months of the pandemic. From delivering essential supplies to expediting deliveries to customers who are in emergencies – here’s how the global 3PL market is facilitating global retail.
The Importance of 3PLs
Third Party Logistics companies held a vital role in the global retail framework long before the pandemic. The 3PL market was valued at 1 trillion in 2019 and is expected to grow at an annual rate of 9% until 2026.
Of course, top logistics companies are being tested like never before. But, the adoption of tech-based solutions is making it easier for these experts. The leading 3PL providers use software solutions to manage warehouses using real-time data. Other tools, such as real-time inventory tracking, make shipping and transportation very easy for manufacturers worldwide.
Businesses with compromised supply management chains are finding it hard to meet commercial and financial expectations. In contrast, companies with reliable tie-ups with 3PLs have used the pandemic to improve their delivery services consistently.
How 3PLs Help Businesses Achieve Supply Chain Excellence During the Pandemic –
- Lower Operating Costs – While other businesses are scrambling to meet unexpected expenses because of the pandemic, companies who have teamed up with top 3PLs have spent the pandemic reducing operating costs.
- 3PLs enable sellers to consolidate orders using a centralized system or software. Such a sharp order processing system helps reduce distribution costs. Hence, sellers can sell their products either at lower prices or with bonuses like free shipping. Companies can engage in competitive pricing, thanks to 3PLs.
- Zero Inventory Requirements – Storage and warehouse management have proven to be significant problems for smaller businesses. However, businesses that use the services of 3PLs haven’t had to worry about inventory during the pandemic. Top 3PL companies store their clients’ goods and prepare them for timely customer deliveries. Sellers of perishable goods have benefited the most.
- Improved Vendor Performance – Signing up with a 3PL immediately enhances a business’s storage and distribution capacities. They haven’t had to invest in expensive distribution technology during the pandemic as the largest 3rd party logistics companies already have top-quality warehousing infrastructure, tech-driven transportation systems, and, most importantly, a scalable delivery fulfillment team.
Third-party logistics providers have absorbed countless operating costs for retailers. That’s why companies who have partnered with them have been able to improve financial results during the pandemic.
On the other hand, companies without these logistical advantages have had difficulties such as –
- High inventory levels
- Inventory deficiencies
- Increased costs
- Absence of data-driven decisions
- Increasing logistics costs
- Increasing distribution costs
Why Outsourcing Logistics Is the Key To Market Expansion During the Pandemic?
The pandemic has completely changed the retail market. For many businesses, readjusting to this new market will be extremely challenging. Despite an increase in product demand, unsatisfactory supply chain management is making many businesses fail on their deliveries. 3rd party logistics companies can usher these businesses into this new market via efficient logistics support.
- Risk-Free Deliveries – With a reliable 3PL, companies have flexibility. They can challenge this new post-pandemic market without committing too many resources. For instance, there’s no requirement to set up new warehousing spaces or employ workers. 3PLs are far more efficient at avoiding shipping delays because they have wide distribution networks. Plus, their services are insured, so sellers are protected in case their products get damaged during transit.
- Instant Experience – Order fulfillment, warehousing, transportation, etc. are more challenging than ever. However, third-party logistical experts are prepared for the pandemic. Their experience will ensure that delivery services are not hindered while businesses can improve other aspects of their business.
- Cost savings–Maintaining a storage space and staff is very expensive. The uncertainty because of the pandemic is further increasing expenses. Partnering with a reliable 3PL not only eliminates these necessary costs, but businesses can also receive other benefits such as inventory forecasting. Top 3PL companies provide inventory forecasting models that help suppliers optimize their inventory levels.
Are 3rd Party Logistics Companies Reliable?
A 2016 study assessing the collaborative relationships between businesses and third-party logistics providers revealed that –
- 93% of relationships between businesses and third-party logistics providers were successful
- 70% of businesses confirmed that outsourcing logistics help them reduce expenses.
There’s no doubt that 3PLs play a vital role in global commerce. The pandemic has forced these experts to meet more demanding customer expectations. For businesses, teaming up with a top-quality logistics partner that offers these qualities has never been more urgent. 3PL partners can help businesses mitigate various types of risks during these uncertain times.
Sellers are aware that their supply chain is their ‘élan vital.’ Companies who team up with 3PLs can embrace their customers, not deny them during the pandemic. Their employees can focus on creating the right product, while third-party logistics experts will provide timely deliveries.