The Renewed Case for Third Party Logistics
By Len Batcha
President
Technical Transportation, Inc
As the logistics and transportation industry continues to evolve, many headlines speak to keeping up with Amazon, Uber and Lyft, and the benefits those companies provide to consumers. But when you turn to big-ticket items, the conveniences of two-day delivery by virtually anyone with a driver’s license goes out the window.
Such items still require a level of training and expertise that can’t be virtually realized overnight. For manufactures of complex and highly valuable equipment and technology, you have two primary choices: 1) invest internally in developing a logistics staff for transporting, delivering and installing the products yourself, or 2) hire a third-party logistics provider (3PL) to handle it for you.
In this blog, we look at the case for hiring a third-party partner.
Single Source Logistics
One top reason is cost. With a 3PL, you don’t have to build and manage it all yourself. From the capital investments to the HR implications to your bottom line, a third-party provider already has everything in place, eliminating a burdensome department budget for finances, headcount, and capital equipment.
The top providers will be your single source for all logistics matters, from scheduling, documentation, compliance for regulatory entities, invoicing and beyond. This also means you only have to deal with one provider to manage all those needs, and ideally only one point-of-contact within your vendor’s organization for a truly seamless experience.
Driver Shortage
The transportation industry is in the midst of a driver shortage that will likely get worse before it gets better. If you bring the logistics function in house, your company must not only manage the hiring, training and retention of those drivers, but you must also recruit from a highly competitive pool, which adds to your recruiting, benefits, training, insurance, and HR expenses.
By choosing to outsource your logistics program, your third-party logistics partner manages and carries the burden of having the appropriate driver personnel and equipment available to fulfill the job.
Regulations
Hiring a third-party provider also shifts the burden of complying with government regulations, such as the recent electronic logging device (ELD) rules that many logistics companies are adjusting to this year. However, it’s always recommended that you remain aware of regulations and ensure your 3PL provider is compliant.
Outsourced Expertise
The transportation, white glove delivery and installation of equipment and technology carry a unique set of challenges. High-end, heavy or sensitive equipment such as x-ray and MRI machines, in-store retail equipment, laboratory devices and the like require a high level of expertise and knowledge of the given industry, as well as the specific requirements of the machines and equipment being handled, delivered, and installed.
Rather than recruit, train and retain employees in-house, a specialized logistics partner that has experience in your industry can help solve these challenges. One tip, however, is to make sure the logistics partner you choose has the internal capability of quickly training their teams on the ins and outs of your products. Having the team who handles your equipment become de-facto experts on your products ensures you have a successful delivery and satisfied end-customer.
Customer Experience
A service-minded 3PL can also maintain or enhance your customer experience. The ideal partner would become a brand ambassador for you and go the extra mile for you and your end-customers.
In fact, according to the 22nd Annual Third-Party Logistics Study, produced by Infosys Consulting, Penn State University, and others, 89% of shippers and 98% of 3PLs said that 3PL usage had translated into improving customer services “to the ultimate customers.”
Need Help?
Would you like to learn more about third-party logistics providers, or do you have questions about how to select one? Contact us today and we’d be happy to provide some counsel.
