If you are wondering why are 3PLs important in recent years, you are in the right place. The deregulation of the trucking industry in the US in 1980 kickstarted 3PLs use by many companies. It rapidly rose after globalization and digitalization in the 1990s worldwide. And its importance is skyrocketing with the booming of ecommerce companies in recent years. Ecommerce sales crossed 4.2 trillion dollars in 2020 thanks to the 3PL solutions because even most Fortune 100 and Fortune 500 companies are using it. Many of its benefits by using advanced technologies are significant reasons for its increasing importance.
So, check out the need for the 3PLcompanies and their solutions and ten reasons for their increasing importance in recent years.
Why do companies need 3PL?
Until 1980 managing products throughout the supply chain was a cumbersome process for all companies. Handing the products, storing them in warehouses, transporting them, and others required separate management. The digital revolution and globalization transformed the broader economy increasing the need to shape the supply chain processes. Also, there was a significant change from manufacturing handing over products to distributors, retailers, and resellers to deliver to customers directly. The smaller ecommerce companies were unable to do it compared to their bigger counterparts. It is here that the need for the best 3PL companies increased for even the smaller companies could deliver the products at customers’ doorsteps quickly.
Which companies can use 3PL?
Statistics confirm that 85% of the Fortune 500 companies in the US use 3PL companies for their logistical needs. Also, many of the Fortune 100 and Fortune 500 companies worldwide utilize 3PL solutions. It is not because of having enough resources like the case of startups or small companies but because of the evolution of 3PL companies. In the last four decades, they have evolved from a low-tech, slowing-moving commodity-style sector; it is now at the forefront of innovation in providing the best, fast tech-enabled logistical solutions. They are becoming an effective ecosystem to bring modern processes to provide ecommerce offerings for all types of businesses. They also offer many value-added services with the help of technology to increase their importance in recent years. Hence, even starting from scratch, any company can use 3PLs to transport their goods safely and quickly.
Five fantastic reasons for the 3PLs to be important in recent years
3PLs expanded operations worldwide with robust integration of many business operations in recent years. Globalization favored the economic conditions in many countries like India, with high buying potential. Hence many US companies started operations overseas, which increased the need for the 3PL companies. The best 3PL companies transport goods in flights, ships, trains, and trucks to reach destinations worldwide. There are many other reasons for the 3PLs to be important in recent years, including others.
- Handling all the supply chain processes efficiently
Irrespective of the size of the companies, they cannot handle the entire supply chain process efficiently. Logistics is not the core of their business but others like manufacturing and marketing their products. Hence even having an in-house logistics department will not be sufficient as the business grows and expands, breaking geographical barriers. Hence, they need the best 3PL companies to effectively deal with all the supply chain processes as their core operations. It will also help the companies not worry about their logistical needs as it is taken care of skilled 3PLs. So, they can focus more on their core activities to develop their business to new heights.
- Lack of resources for fulfilling logistical needs
Most companies need logistics to transport their finished goods to reach their destinations, from distributors, retailers, and customers. But small or medium-sized companies or startups lack the resources for such logistical needs. They cannot have a separate in-house logistics department or spend massive money on logistics. Hence, they seek the service of 3PLs to take care of all their logistical commitments efficiently.
- Enable to leverage the latest technology
Since, for many companies, their core business is not related to logistics or technology, they find it hard to leverage their latest advancements. But for a 3PL company, facilitating it with tech-enabled solutions is the prime focus. Hence companies using 3PLs will leverage the latest technology for shipping their goods to keep track of them in real-time.
- Oversized loading and dangerous goods transportation made easy
Even for experienced logistics companies transporting oversized, out-of-shot, and dangerous goods, shipping is challenging. Hence, it is nearly impossible for manufacturing or other companies to transport such goods. But 3PL companies with a professional and experienced team of logistics personnel will be able to do that quickly and safely.
- Value-added services
Apart from transporting goods, 3PLs offer many value-added services that enable companies from many sectors to make their work easier. A few of the value-added services by 3PLs include
Professionals pack, crate, and box the products to transport them safely for even reaching far-off distances.
- Warehouse facilities to store the products from many companies and software to make it smart and fast without any errors to accelerate the shipping processes to develop their business
- Offer the best reverse logistics to track the returns and replace them fast to gain the customers’ trust.
- Provides holistic logistics outsourcing for sports & corporate events, tours, concerts, trade shows, among others
- Offers the best last-mile delivery services with real-time data analytics that are flexible and efficient for airport transfers local pickups, among others
The above facts and reasons will help you know why 3PLs have been influential in recent years. And in the future, their importance is only to increase more as ecommerce sales and logistical outsourcing are to rise rapidly. And more and more companies will outsource their logistical needs to the best 3PL companies. But only the best 3PL company can offer you all the above value-added services to improve your business. Also, by leveraging the advancing technologies, the 39L solutions will become better and more effective in the future.