Study On Third Party Logistics

1. THIRD PARTY LOGISTICS
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MBA 2nd YEAR

2. Providea better customer experience: Customers expect next-day or same-day shipping as standard. Using a
third-partylogistics provider allows you to offer fast shipping no matter where the order is being sent, thanks to
having access to the 3PL’s wide distribution network.
Test new markets: With an international3PL, you have the flexibility to test the waters in new markets without
having to commitment to any major investments like your own warehousing space or staff.
Mitigate risk: Shipping delays can and do happen for a number of reasons. When unforeseen circumstances pop
up, a 3PL is responsiblefor making alternatearrangements to fulfil your orders as quickly as possible. You’ll also
be protected in the event of damage or loss of goods.
Gain instantexpertiseand knowledge in the field. Especiallyif you’re just starting out, who betterto take care
of your logistics than a company that specializes in them? Fulfillment, warehousing and shipping come with major
challenges of their own, so handingit off to the experts can really make a difference in the way you function - and
it leaves you to focus on increasing your overall value to your customers.
Get a handle on internationallogistics. If you’re selling internationally, 3PLs can take care of documentation,
customs, duties and otherissues that come up at the borders that can delay your shipments and result in high costs
if not done thoroughly. Plus, you save time trying to work out complicated rules pertaining to different countries.
Generate cost savings. When it comes to warehousing, not having to maintain your own space and staff can be a
big cost-saving measure. Also, companies that provide good inventoryforecastingcan help optimize your
inventory levels and save money on inventoryholding costs.

3. 3. Compatible technology.
If you’re using a cloud-based inventory management system, you should probably choose a company that is similarly
cutting-edge and ready to integrate with your stock control software. Ensure that the 3PL provider’s technology works with
how you work.
Why Choose3PL?
There are many reasons why companies choose to go the 3PL service route. Often, as a company grows, the need
for warehousespace increases beyond that business’ ability to manage it. 3PL warehousing can be a good option
for companies facing storage capacity issues. Other companies may be challenged with increasing transportation
costs and investment in equipment and vehicles. The large fleets of modern vehicles and equipment that are
available through 3PL providers are often a much more cost-effective solution.Then there are US businesses
looking to expand into the Canadian market – a good 3PL will have the depth of experience to help solve many
logistics challenges involved with these scenarios.
Other reasons why companies may choose to partnerwith a 3PL includechallenges with customer service, order
fulfilment, returns, ordertracking, technical services, inventory management, and more. As you can expect, the
more of these struggles that a company faces as they grow, the more value a 3PL partnercan provide.

4. Whatare the cons of using a 3PL provider?
A 3PL isn’t for every business. Here are a few drawbacks for you to consider. Would these impact your business?
Lesser control over the deliveryprocess. With a third-partytaking care of your shipping, there can be challenges
when there are delays or problems in shipping a customer’s order. The customer will be looking at you for the
resolution, not your 3PL.
Larger upfront investment.
On the flip side of the cost issue, while hiring a 3PL can pay for itself in the long run, the investment can still be a
large cost in the beginning. If you don’t need a big warehouse or don’t have many orders, the cost of a 3PL can be
prohibitive.
More distancebetween you and your product.
The 3PL you choose may position you far away from your products, which would be an inconvenience if you run
into qualitycontrol issues, or need to physically inspect your stock for any reason.

5. Benefits of 3PL
3PL logistics providers can deliver a great deal of value to companies that are dealing with the challenges associated with rapid
growth or changing market conditions. Here are some of the main benefits that can be realized by utilizing 3PL logistics.
Cost Savings
3PL providers have vast networks of resources across the country, and the globe. This includes warehousing space, trucking
and transportation fleets, human resources, and technology that your company can take advantage of without the necessary
massive investment in overhead and capital setting this all up on your own would require. This level of flexibility adds up to
significant cost savings which have a big impact on the bottom line.
Flexibility
The level of service you obtain from a 3PL provider is entirely up to you, and can be adjusted to accommodate different levels
of business due to seasonal or cyclical demands. For example, if your company sees a big surge in orders every year for the
holidays, 3PL companies can scale up services and labor accordingly to meet high demand needs, and then go back to normal
levels once the surge subsidesEfficiency
In addition to the savings in capital costs, many companies see a significant savings in time through 3PL services. This can take
the form of lower cost per unit shipped, faster transportation and reduced delivery times, and in the ability for the whole
organization to devote more time to its core specialties, including product development, customer service, sales & lead
generation, or market growth.
Improved efficiency means greater return on your investment.

7. What’s 3PL?
3PL is a service that allows you to outsource operationallogistics from warehousing, all the way through to
delivery, and ultimatelyenablesyou to focus on other parts of your business.
Third-partylogistics companies provide any number of services having to do with the logistics of the supply
chain. This includestransportation, warehousing, picking and packing, inventory forecasting, order fulfillment,
packaging and freight forwarding. Wondering if your business needs to use a 3PL provider? When in doubt,use a
pro-con list - we got started on one for you.
Whatare the benefits of using a 3PL provider?
Using a 3PL provider offers lots of advantages. The biggest is that by handingover these logistics, you can focus
on other aspects of your business such as sales, marketing and product development.Outsourcing 3PL leaves you
with more time and resources. Here are a few otheradvantages:
Costreduction. 3PLs have more leverage with freight companies than individual shippers do. Working with
carriers on behalf of multiple customers, 3PLs can negotiate pricing based on volume and order frequency. Using
a 3PL to manage all or part of your supply chain also gives you the freedom to invest in other key areas to
grow and develop your business.
Scale up or down as needed: Most businesses experience fluctuationsin demand throughoutthe year. Using a
3PL allows you to manage peaks and troughs more effectively without having to commit to capital when you
don’t need to.

8. Warehousing & Inventory Management
Order Packing & Fulfilment
Value Added Services
Certified Technician Services
Transportation & Shipping Coordination
Order Tracking & Status Communication
Customer Service
Returns Processing & Reverse Logistics
International Logistics & Customs Expertise
Custom Solutions
As your company continues growing, it’s inevitable that you will encounter additional challenges related to rising costs,
increased logistics complexity, and changing customer needs. 3PL logistics can be an excellent way to address these challenges
before they become a hindrance to the continued success of your business. Identifying the areas where 3PL service can bring the
most benefits to your company may be difficult, but with the right 3PL partner, you’ll get the guidance and direction you need
to implement an effective plan. The experts at SCI will work with you every step of the way to identify the biggest opportunities
for your company to take advantage of with 3PL services.

9. Which3PL company is right for you?
Because of the sheer number of options, choosing a final provider can be an overwhelming process. On top of that,
you must gather detailed information about the real cost of 3PL for your business.
Here are a few things for you to consider when choosing your 3PL partner:
1. Current and forecastedvolumes.
Choose a 3PL that can handleyour current volume, but that also will be ready to handleyour volume if you
suddenlyadd a bunch of new stock, increase your stock volumes, or have a great spike in sales. You want to
choose a 3PL that can handleyour business now and handleit when you’re at full speed!
2. References and business performance.
Check out references from othercustomers that use the 3PL provider and get a report on the company’s
performance over the last few years. Seek out references and information about on-time deliveries versus delays,
and how they compensate businesses when there are problems. See what their customers are saying about them -
customer case studies and quotesare a good indicatorof how the 3PL provider has built and maintained the
customer relationship.

10. Customer Experience
In addition to business-side benefits, there are many customer-facing benefits to 3PL services. Companies can expect to achieve
faster and more reliable delivery times, improved tracking and order status communication, reduced chance of damage or
incorrect product packing, and more. All these benefits make a big difference in overall customer satisfaction and retention,
while improving the average lifetime value of customers and your brand image.
International Reach
When an American company expands beyond its country’s borders into Canada, a new set of challenges arises in the form of
regulatory compliance, customs clearance, and communications. 3PL providers are able to assist companies with a smooth and
efficient entry into new markets through the use of their established & extensive Canadian networks.
For anyone considering a move into Canadian markets, the guidance available from experienced 3PL logistics providers is
extremely valuable.
Services Available from 3PL Providers
While virtually any logistics function can be done by major 3PL providers, these are the most common logistics processes and
service available from leading Canadian third-party logistics companies.