Fulfilling customer orders is always the priority of any business’s day-to-day operation. The process often starts when the customer places the order and ends when the product has reached the customer’s doorstep. While it may seem to be a simple process, things may become quite complex when you start factoring in the customer’s location, company’s inventory, storage location, the size of the order, and the deadlines or time of delivery. Things become even more complicated when you start to factor in the potential for returns. What happens when your company grows beyond its capability to manage its order fulfillment services? This is where you should consider outsourcing third-party logistics operations.
Today, 3pl logistics solutions are renowned for their expertise in the logistic industry. They help companies better fulfill their orders and meet customers’ demands. Companies can hire 3PLs to handle their entire process of storing, packaging, and shipping orders without doing it themselves. Remember to always outline what services you would wish to retain in-house and what services you want the 3PL to provide before signing any contract. Later, you may allow the 3PL provider to take on a more significant role as your business grows.
What goes into 3pl solutions?
3PL solutions cannot only scale but also customize its services to meet the specific needs of your clients. Throughout this process, your business will still retain some level of oversight in regard to the management of shipping operations. Here is an overview of the services provided by a typical 3PL.
3PL providers utilize shared storage which saves businesses from finding storage space for all of their inventories. This maximizes efficiency and keeps operating costs down.
b) Inventory Management
3PLs go beyond just storing your company’s products to include technologies that can sync your inventory to your online store in real-time. In other words, you’ll be able to predict demand and avoid sell-outs by tracking your inventory.
c) Inventory Distribution
Since 3PLs are involved in warehouse management, they can distribute your company’s inventory across several fulfillment centers for fast shipment. With the right management software, various fulfillment services can be automated to allow orders to be routed to the best fulfillment center. This makes inventory distribution more profitable.
d) Picking and Packing
3PLs have a skilled workforce that is capable of performing specific tasks which are ideal for their order fulfillment services. This includes picking the products for each order and packaging them appropriately for shipping.
e) Freight Forwarding
3PLs are responsible for forwarding your products to a shipping carrier for delivery, once the products have been picked and packaged. 3PLs have industry insight and they will always pick a shipping carrier that offers the fastest delivery at an affordable price.
f) Expedited Shipping
Since 3PLs have fulfillment centers that send orders daily, they enable your company to enjoy the discounts negotiated with popular carriers like USPS, and DHL among others. This enables your business to deliver products faster and at an affordable price.
g) Shipment Tracking
3PLs manage all the tracing and tracking processes allowing your customers to access shipping information throughout the order fulfillment process.
h) Returns (Reverse Logistics solutions)
Other than providing shipment services, 3PLs can also provide reverse logistics solutions by providing customers with return labels that will enable them to drop off the item with a carrier.
Warehousing, Shipping & Freight Capabilities from GoFreightHub
Now that you have understood the basics of 3PL, I believe you understand that it is important to hire a 3PL company that will guarantee you more control over your production chain. Don’t look further than Go Freight Hub which is a complete asset-based 3PL with a technology-centered platform and solutions for your specific freight needs. Go Freight Hub is a certified 3PL provider that offers domestic solutions for Container Drayage, Nationwide Full Truckload, and Last-Mile delivery with an elaborate warehousing and transportation system to complement the supply chain.
Go Truck Hub offers a proprietary, in-house transportation system that enables your business or company to have more control over freight. Furthermore, Go Truck Hub provides full domestic transparency, thanks to their cloud-based platform that facilitates good communication and automation putting everything in one location.
Go Truck Hub will guarantee you an Uber-Like experience during transportation or shipping products due to their skilled engineers and trucking assets. The company also has professional company drivers and dispatchers who are backed up by an all-in-one online platform that ensures the whole freight process is smooth and seamless.
Good news! If your freight is located in South Florida, then, Go Truck Hub can pull your containers quickly and efficiently using the on-demand-based fleet at the Port of Miami and Port Everglades. Just request a quote, and the company’s expertise will guide you.
What are third-party logistics?
Third-Party Logistics (3PL) are organizations that focus on providing logistical support or services to companies that need inventory management and distribution. Basically, any company without logistics services will seek the help of a 3 PL.
If it’s your first time outsourcing shipment services, then, what goes on in a 3 PL fulfillment center may seem like a mystery. So, what exactly happens in a 3 PL fulfillment center? Here’s a summary of the entire process from start to finish.
The third-party logistics process
The first step is always to move your inventory to 3PL’s warehouse management system. Take note that 3PL providers may have various processes for receiving and storing inventory, however, most 3PL companies can customize their services to meet your needs. Remember, your inventory may be distributed through several fulfillment centers depending on your business size. This is to ensure that your orders can be fulfilled quickly and efficiently.
Once your inventory has been received by the 3PL company, they are stored in their warehouse management system. Remember, different 3PL companies have different storage capacities. You should pick a company that has more than enough storage or can increase its storage capacity as your business scales up in volume.
The 3PL will begin fulfilling the order by collecting the item once the customer has placed an order. You can send this information directly to the 3PL or manually upload the order to their system: that will depend on the management software offered by the 3PL provider. At this stage, the item will be collected and moved to the next stage of the supply chain which is the packaging.
Once your item has been picked, it has to be packed for shipping. You may be able to choose the packaging for your orders, but that will depend on the customization options offered by your 3PL provider. However, standard packaging may include bubble mailers, unbranded boxes, bubble wraps, or poly bags. Your 3PL should be able to choose the best packaging that will not only offer protection to your items but also offer the lowest practical dimensional weight to reduce the shipping cost.
At this stage, your packed item is forwarded to the shipping carrier. While other 3PLs choose to compare the cost of shipment among various carriers, others may have their preferred shipping carrier.
Returns are among the biggest concerns for any business and it might get messy if your business is handling large stock of inventory on its own. A 3PL provider can provide shipping labels to your customers which will allow them to return products to the 3PL. Your 3PL provider will then process, restock and dispose of the product based on your policy. This streamlines the whole process as well as tracks the return status.
3PL services vs. drop shipping
By now, you already know what 3PL services are. So, we’ll dive directly to drop shipping. This is a retail fulfillment service where stores do not keep the physical products they sell in stock. In this model, the store will pass the order to a third party which will ship the product directly to the customer. In other words, the seller does not come into physical contact with the products they are selling.
The similarity between the 3 PL method and drop shipping lies in the fact that the retailers do not handle the goods. In both cases, third-party companies are involved in the packaging and shipping of the products.
However, there are significant differences between the two methods. In a 3PL method, the retailer has to give the third-party products in bulk after purchasing them. This makes it an ideal method for a retailer who wants to sell products that are costly or highly customized but at the same time, the retailer wants to avoid cost of running fulfillment services. In dropshipping, it is the reverse. The retailer doesn’t need an inventory. The manufacturers are often the ones involved in shipping orders to the customers.
Benefits of third-party logistics
It is possible to assume that you already know the benefits of third-party logistics solutions considering what has been mentioned above. But how exactly would you benefit from such a partnership? Well, here are some of the actual benefits of using a third-party logistics partnership.
a) Saving operational costs
Partnering with a third-party logistics company will save you time and money when running order fulfillment operations. For instance, you’ll not need to make huge infrastructural investments such as warehousing space, transportation service, management software, staff among others.
b) More access to expertise and experience
If you are planning to invest in international markets, then partnering with a third-party logistics firm will be an easy gateway to international markets. We have to acknowledge that the global market is complex and it is almost impossible to accommodate internal expertise in all capacities and regions required. However, a 3PL service will provide you with the necessary knowledge and experience on matters of import and export, transport management, international compliance, and economic regulations.
c) Improved business efficiency
Now that your business is enjoying logistical competencies, your business has a leeway to focus on other core competencies rather than getting involved in non-core but critical functions.
d) Improved flexibility and scalability
With a third-party logistics partnership, there will be no redundant investment or underutilized resources when the business or your sales are down. However, when there’s a surge in demand for your products, then, your business can upscale easily.
e) Promotes business growth and market expansion
Third-party logistics operations promote business growth by giving companies access to markets where they have not yet established their presence. Companies can manage inventories in new markets without having to spend money on equipment, warehousing and transportation, or labor.
f) Improved customer satisfaction
All the benefits of 3PL firms from improved services, timely deliveries, improved response time, and greater brand reliability, translates to customer satisfaction.
Who should consider outsourcing their fulfillment logistics to a 3PL?
Any business or company without logistics solutions should consider outsourcing their fulfillment services to a 3PL. Also, any business or company that intends to expand into international markets should consider third-party logistics services.
How can 3PL services help your eCommerce business?
E-commerce is a fast-changing industry and it is important to limit your risks by considering external support. An e-commerce business can benefit immensely from 3PL services which can facilitate a smooth start-up. E-commerce businesses can also stay on top of technology by considering a third-party logistics partnership. 3 PL firms provide e-commerce businesses with the expertise, and financial investment required to implement technological solutions. With 3PL’s continuous improvement in methodologies, it has made it possible to custom engineer processes to improve order accuracy. Lastly, 3PL firms can provide cost-saving shipping options for e-commerce businesses through their preferred shipping carriers.
What to consider when selecting a 3PL provider?
Even though 3PL companies seem to present significant benefits, you shouldn’t jump into signing a contract with them without considering certain factors. For instance, you need to consider the logistic capabilities of the 3PL provider otherwise, it might limit your expansion capabilities. You need to consider their focus on customer satisfaction or else your risk working with a 3PL provider that doesn’t maintain fluid lines of communication with your customer. You also need to consider the features provided by the 3PL’s management software. The general safety record of the 3PL provider is also an important factor to consider since you don’t want your products getting damaged during storage or transit. Lastly, it is important to consider the 3PL provider’s geographical reach. Every 3PL provider has an expansive network of fulfillment centers. Choosing a 3PL provider with an extensive management system and fulfillment centers within your target market will ensure that your shipping cost and transit time are significantly reduced.