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3PLs Aren’t All Created Equally – Understanding the Difference

April 13, 2022
5 min read
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3PL's Aren't Created Equally

Shipping in the US can be expensive, complicated, and time-consuming, but 3PL service providers work with shippers to ease the process significantly. 3PL services can assist busy managers and business owners in simplifying the shipping process. However, 3PLs aren’t all created equally, and understanding the difference can save shippers time, money, and stress.

What Exactly is a 3PL?

One of the biggest reasons shippers don’t take full advantage of 3PL services is because they don’t fully understand what a 3PL company has to offer. That’s why today, we’re looking at what differentiates one 3PL from another.

Put simply, a 3PL or “third-party logistics” company is a business that takes care of the logistics management for another company. Services offered can include transportation or freight management, distribution management, warehousing, and shipment consolidation.

What Services Do 3PL Companies Offer?

Not all companies will define 3PLs in the same way, and because of this, many 3PL companies don’t offer all of the 3PL services one might assume. Understanding the different types of 3PL services will help business owners and shipping managers determine which company best fits their needs. Here are a few common types of services offered by 3PL companies:

Third-Party Logistics Services with Advanced Technology

This kind of company specializes in the business-to-business model of logistics. With easy-to-use advanced technology solutions to your most common problem, this kind of 3PL strives to make your life easier. Ask about software options available for shipment tracking and tracing, freight billing audit or payment, and current carrier management solutions.

Third-Party Logistics Transportation Based Services

This kind of company offers a full array of services regarding transportation. With freight, warehousing, and tracking all within the menu of services, CFOs looking to lower costs and Traffic Managers looking for efficiency will both find everything they need. Ask about Freight, LTL, and Truckload shipping, as well as warehousing to lower the cost of your shipping.

How Can Your Company Outsource to a 3PL?

Making the most of the relationship between your company and the 3PL service provider of your choice is simple. In general, there are three basic ways to do business together.

With a strategic outsourcing model, the 3PL company will work with the business on a long-term basis. This helps companies maintain reliable supply chain management and ensure consistently fair pricing and process management.

With a tactical outsourcing model, the 3PL company and your business negotiate individual contract terms to meet all of your shipping, warehousing, and software needs. This helps companies ensure they have 3PL services when and how they need them.

With a transactional outsourcing model, the 3PL company offers no long-term contracts and no long-term relationships. Businesses requiring one-time freight shipment or gap logistics services will typically utilize the transactional outsourcing model.

As with any vendor or partner, service is what matters most when choosing to work with any 3PL. When deciding who to partner with, ask the tough questions about service-related issues. What happens when the package doesn’t arrive? How are claims handled? Is there a dedicated support staff in place to handle issues? What value-added services can they provide? Taking the time and asking great questions will ensure a great decision when the time comes to make it.

The Amware Advantage

As a full-service third-party logistics company, Amware offers all of the supply chain management services and tools you need to run your business, including:

For efficiency, transparency, and reliability, consider choosing Amware for your 3PL services.

If you’re ready to start saving 30% or more annually on LTL and shipping, click below and experience the savings Amrate can offer!

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