It’s more common today than ever before to use a third-party logistics company or 3PL to help manage supply chain logistics. A 3PL can offer custom solutions that meet your particular needs for assembly, packaging, warehousing, and logistics software integration. A 3PL can act as a valued partner in helping your business manage its supply chain logistics, especially if it’s a growing business facing growth-related challenges. Let’s take a closer look at the history of 3PLs and how partnering with one may benefit your business’ supply chain.
The 3PL Origin Story?
Several decades ago, the trucking, warehousing, international shipping, and IT industries were separate. Businesses that shipped products viewed and managed these functions independently of each other.
In 1980, the Motor Carrier Act (of 1980) made its debut and changed the logistics landscape. Its purpose was to deregulate the trucking industry by easing the regulations which had, up to that point, been imposed by the Interstate Commerce Commission. The deregulation opened the door for increased competition by redefining contract and common carriers. It also allowed individual carriers greater freedom to set their own rates.
These changes led to a significant increase the number of shipping carriers. Believe it or not there were less than 20,000 carriers in 1980 compared to the approximately 1.2 million in operation today. Now, third-party logistics companies (3PLs) are able to offer shipping and warehousing clients greater value and flexibility than a single carrier likely ever could.
The Benefits of Working With a 3PL
The greatest benefit of hiring a 3PL service to manage supply chain logistics like packaging, warehousing, fulfillment, and distribution is cost savings. A 3PL can reduce or eliminate the high cost associated with maintaining a warehouse. 3PLs also reduce the associated labor costs incurred by companies choosing to fully manage supply chain operations internally.
Also, if having the ability to scale is important to your business, a 3PL can greatly ease those transitional growing pains. For example, if yours is a seasonal business with slow and busy times of the year, warehousing with a 3PL and using them to assemble, package, and ship your products to distributors or end users direct from the warehouse saves from having to sore and manage excess inventory during slower periods, while offering the additional help and lower shipping costs during the busy times. The savings in the hiring and management of seasonal labor alone would likely show a huge savings. Partnering with a 3PL will also allow you to potentially extend your supply chain in areas where you currently lack an established presence.
With a 3PL by your side, you’ll be able to spend more of your time and energy on your core competencies instead of trying to figure out how to handle all of your supply chain logistics challenges.
Partner with a 3PL Who Understands Supply Chain Logistics
Unfortunately, saving money while tackling your supply chain logistics needs on your own probably isn’t your primary area of expertise . That’s where a 3PL provider comes in. If you’d like further information on how a 3PL provider may improve your supply chain logistics and help your business grow, contact the team at Amware today. While we may not be able to solve all of your supply chain related problems, when it comes to supply chain logistics, we’ll accept that challenge any day of the week and twice on Sunday. And as a way to show you we’re not all talk, we invite you to put us to the test with a 30-day free trial of our newly redesigned LTL software, Amrate. Request your trial today and let us show you how to streamline your supply chain logistics.