A third-party logistics provider, sometimes called 3PLs, refers to a firm that provides outsourced logistics services to client companies for part, or all of their supply chain management functions. They must focus on customer relationships and service management. Some of the most common services they provide are transportation, customs, order fulfillment, cross-docking, inventory management, packaging, and freight forwarding. However, every 3PL company is different.
By outsourcing all or much of a company’s logistics operations to a specialized company, shippers are enhancing their supply chain. On top of that, both 3PLs and its customers are increasing in proficiency which can only create greater mutual benefits. This kind of business relationship has allowed openness, transparency and effective communication between the two parties. Don’t believe it? Here’s the first statistic.
As many as 91% of 3PL customers and 97% of 3PLs report successful relationships between the 2 parties and positive work results. Those numbers are quite impressive. But that’s not all.
These statistics came from various Shippers in regards to 3PLs:
- 88% of 3PL users agreed that 3PLs were providing better and innovative logistics services.
- 75% of shippers said that using 3PL services had reduced their overall logistics cost.
- 83% of shippers agreed that using 3PLs had contributed to improving services to customers.
- There was a clear perception within shippers that there was a reinforcement of transparency and effective communication between them and 3PLs. They also agreed that both should remain flexible enough to accommodate their business needs and challenges.
- Additionally, the concept of “gainsharing” and “collaboration” were given importance by both parties since they consider consolidation a possibility in the future.
- 58% of shippers indicate they are increasing their use of outsourced logistics services this year.
- The most common outsourced activities are transportation with 86%, warehousing with 66% and freight forwarding with 44%.
- 73% of shippers interacted with 3PLs on a daily or hourly basis.
- The use of Cloud Computing by 3PLs has helped shippers reduce their transportation costs, improve visibility, and manage inventory successfully. As well as achieve regulatory compliance, which are the biggest challenges for shippers.
- 93% of shippers also stated that data-driven decision-making is essential to the success of supply chain management.
Outsourcing business activities is leading the global 3PL market to be worth $935.31B by 2020. The reason why companies are choosing to outsource logistics services is because 3PLs are refining and expanding their core competencies. 3PLs are proving to be a valuable asset due to their ability to help companies cut costs, optimize processes, increase productivity and save time. The statistics don’t lie.
BoxOn L
ogistics
If you are a shipper or a 3PL looking to enhance your logistics operations, try BoxOn. It’s a complete, end-to-end software for Logistics providers meant to create a technology platform that mirrors your business needs and makes your business far more efficient and profitable.
So try a FREE BOXON DEMO or Contact BoxOn Logistics at sales@boxonlogistics.com
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