It’s easy to overlook the role that 3PL logistics providers play in the overall global economy and, at the same time, enable your business to operate and compete.
That was never clearer than during the past 14 months of the pandemic as goods continued moving to the right place at the right time. Logistics was genuinely essential to people being able to continue their lives, no matter how disrupted they were.
The pandemic highlighted the complexities of the modern supply chain and the need for companies to engage with a third-party logistics provider to succeed. Companies of all sizes engage with 3PLs and 4PLs to ensure access to technology, capacity and strategic insights.
Selecting a partner that is the optimal fit for your business can be challenging. Below are some of the critical characteristics to look for in a logistics service provider partner to execute supply chain transformation.
3PL vs. 4PL Differences Explained
During the pandemic, companies found it difficult to access logistics solutions and manage capacity on their own. They turned to 3PLs with deep carrier relationships which can find space when they need it. However, the 3PL provider is often seen as transactional focused.
That’s where the 4PL or managed transportation relationship comes into play. Under a managed transportation relationship, a company partially or fully outsources its logistics and transportation functions, including managing other 3PLs.
Companies look to 4PLs to manage their freight operations and service providers through supply chain planning, day-to-day execution and strategic recommendations that reduce company freight costs, improve operational processes and give businesses a competitive advantage.
1. Supply Chain Improvement Starts with Technology
Look for a 3PL provider that offers a TMS and technological capability to provide real-time data to drive optimized decision-making and automation. Pricing may vary significantly based on carriers, lanes and capacity constraints. 3PLs should provide cost prediction model intelligence on pricing and market trends via a live dashboard to help shippers adapt to rapidly changing market conditions, automate processes and gain visibility.
2. Multi-modal Expertise, One of the Many Benefits of 3PL Partnerships
Using multimodal shipping services and logistics solutions helps mitigate capacity challenges and meet customer delivery expectations. Full-service 3PLs have access to a broad range of carriers and transportation services that can be combined to create custom logistics solutions for your business.
3. Carrier Relationships Add Capacity Coverage
A strong carrier network is essential to a company’s supply chain. Many shippers have varying needs for specific lanes to move freight. Shifting consumer demand, bad weather, driver shortages, fuel prices and an array of influences conspire to shrink available capacity and can impact a company’s ability to move product. 3PL logistics providers have a large network of pre-qualified carriers and can help you find capacity where and when you need it. 3PL provider carrier partners are essential, and 3PLs bring them freight that they would otherwise not have.
4. Solutions for Supply Chain Improvement
Tap external expertise to assess supply chain risks and develop plans to adapt to them. An experienced 3PL provider has developed strategies for many other shippers and can adapt successful strategies for a customized supply chain optimization plan. When we engage as a strategic partner with our customers, we provide a control tower view over an entire supply chain operation. We work with vendors to ensure that inbound freight is being handled properly and is moving to the right place at the right time and manage the outbound moves to the end customers.
5. 3PL Providers Have The Expertise to Make a Supply Chain Transformation Happen
The vital role that 3PLs providers play in a supply chain is to connect carriers and shipper customers. While that seems like a simple statement to make, it’s a difficult concept to execute. Ultimately, you want to find a logistics partner that provides technology-driven and people-powered supply chain solutions with your customers’ needs in mind, the receivers of the goods. At GlobalTranz, our goal is to find new ways to decrease cost, increase efficiency, provide a competitive advantage for your business and help you increase your service levels with your customers.