Third-party logistics is the outsourcing of supply chain elements such as distribution, warehousing and fulfilment services to a third-party business. This is becoming more and more common with the rise of private label businesses and dropshipping businesses.
Third-party logistics providers offer a wide range of supply chain solutions. This allows you to work with them as in a partnership so you can deliver top-notch service to your customers. Current technological advancements are allowing you to have real-time data and information at your disposal, making third-party logistics a trustworthy and reliable solution.
The benefits of using third-party logistics include:
Savings Of Resources Such As Time And Capital
Third-party logistics providers have built their services around the logistics niche. They have vast experience in the industry and more knowledge about distribution networks, warehousing and fulfilment services. Enabling them to save your time and your capital.
Constant upgrades and adaptations make third-party logistics providers maintain their quality of service and achieve scalability. But normal manufacturing or production companies cannot do this because of time and budget constraints.
Reduced Capital Expenditure On Infrastructure and Transportation
Using third party logistics allows manufacturers to rely on the provider to pack, transport and warehouse the product. This way the manufacturer does not need to build a packaging section, or a warehouse to store products. Similarly, the manufacturing company does not need to acquire and maintain a fleet of vehicles. This allows them to reduce capital expenditure.
No Unutilised Investments Or Resources
They allow enterprises to scale down the need for supply and distribution services if the sales are slow. This way the business does not have to have unutilised investments or resources, which would otherwise require large sums of money to be maintained even if not used.
Third-party logistics providers can upscale according to your business sales trend. You will not have to worry about supply chain constraints because third-party logistics providers have already planned for future developments. This allows 3PL providers to accommodate your growing sales numbers.
Expansion Into Newer Markets
The use of third-party logistics allows enterprises to expand into newer markets with lower investments/capital and lesser risks. They can outsource the distribution of their products to a 3PL provider making their product to be available in a region where they have no physical presence.
For example, a business can hire the services of a 3PL in a foreign country. Allowing them to sell their products online in that specific country without opening a physical store. They will not have to worry about customs duties and other formalities since the 3PL provider will be dealing with them.
Better Customer Service
A third-party logistics provider will ensure timely deliveries, quicker response time and reliability which will improve the quality of your customer service.
If you operate a manufacturing or production business that is struggling with supply chain management then you should use a third-party logistics provider such as Red Stag. Using third party logistics from Red Stag helps you free up resources for other areas of your operations. Allowing you to focus on the core components of your business and increasing the overall productivity of your operations.