Outsourcing and logistics

If you are a company involved in the physical transportation of any type of goods from one place to another, then logistics services play a vital role in day to day running of your business.

A quite remarkable statistic is that 90% of the Fortune 500 companies in the United States employ third-party logistics providers. (Armstrong and Associates)

These are referred to as 3PLs. A 3PL (third-party logistics) provider offers outsourced logistics services, which encompass anything that involves the management of one or more facets of procurement and fulfilment activities.

The fact is that most companies outsource Transport and Warehousing services. It is, perhaps, the only sensible solution for a problem that can only get worse as the company expands and increases goods traffic. The cost of providing an adequate truck fleet and warehousing facility can easily become prohibitive – BUT – as I have pointed out in previous articles – one should and must consider that this is not the most telling reason for employing an outsourced entity.

A company manufacturing and selling articles does not want to be bogged down by the tedious and meticulous method of their distribution. The main aim is to produce and get paid. How these things get to their required destination is not of ‘core’ importance and will, in most cases, provide headaches as the production of those goods increases.

There are other very compelling reasons to choose an outsourcing route and these can be summarized as follows:

  • To find adequate facilities for global capability within the given marketplace. When you can adequately maintain an increased distribution network, it can be increased by not having the complication of delivery
  • To achieve and maintain customer service improvements. When customers are given the time and point of delivery and those parameters are scrupulously met, customer expectations are met    
  • To increase flexibility and market penetration. When you don’t have to worry about things getting there, your time can be spent on realizing the full potential of the product
  • To benefit from cost advantages reaped when production becomes efficient. This economy of scale can be realized by efficient delivery mapping
  • To tap into advanced logistics technology which many 3PLs now offer to improve visibility, aid process-efficiency, and meet customer demands for real-time information.
  • To reduce Back-office Work: 3PL outsourcing service providers should have sufficient manpower and the proper systems already in place. They are specialized to process a multitude of receipts and audit them appropriately within a short time.
  • To reduce liabilities: The 3PL helps to take care of all inter-connected carrier contracts, safety ratings, and insurance certificates. This makes you not financially liable and the bulk of the hard work is taken care of by the service provider

These then, are the factors that should influence and drive company owners and Directors to investigate and evaluate a third-party outsource provider within the logistics field.                                                                                                          

Add a Comment

Your email address will not be published. Required fields are marked *

Our use of cookies

Paragon Outsourcing use necessary cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences.

Necessary cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytics cookies

We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our 'Cookies page'.

Privacy Settings saved!
Privacy Settings

When you visit any web site, it may store or retrieve information on your browser, mostly in the form of cookies. Control your personal Cookie Services here.

These cookies are necessary for the website to function and cannot be switched off in our systems.

In order to use this website we use the following technically required cookies
  • wordpress_test_cookie
  • wordpress_logged_in_
  • wordpress_sec

For perfomance reasons we use Cloudflare as a CDN network. This saves a cookie "__cfduid" to apply security settings on a per-client basis. This cookie is strictly necessary for Cloudflare's security features and cannot be turned off.
  • __cfduid

Decline all Services
Accept all Services