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How 3PL Logistics Technology Works Best For Small Businesses?

The selection of logistics companies is not limited to the field of 3PL. The breadth of this industry means that its main players can cover and specialize in a wide range of services that have a significant impact on the way in which a product arrives from the manufacturer to the final recipient.

Knowing the different types of logistics companies and the services they offer is the best way to understand how they can affect the business or customers, before perfecting the contract with any of them.

3PL stands for Third Party Logistics and refers to the outsourcing of a company’s logistics operation.  A 3pl logistics companies provide transport and storage services to a manufacturer, acting as an intermediary between it and its final customers; however, facing them there is no difference since orders and billing are managed by the manufacturer.

Which logistics companies are best suited to my business?

Broadly speaking, it could be said that there are logistics companies specialized in three activity groups:

  1. Storage: while some of the companies decide to have their own independent warehouses, many works with 3PL suppliers. The choice of logistics companies, in this case, is based on a decision based on financial profitability or business possibilities. When an external company is hired to handle the receipt of merchandise. Its warehouse and shipping are eliminating the need to face the cost and responsibility of managing a complete warehouse on its own. It is a more flexible alternative that facilitates better control over the expense associated with this function.
  2. Transport: sometimes, the transport of goods may involve a combination of vehicles: trucks, trains and cargo ships, among others. It is a complex and constantly changing field. Resorting to a logistics company simplifies management and avoids problems caused by continuous fluctuations in demand, labor shortages or the pressure associated with delivery times.
  3. Coordination: ensuring that all these services and others associated with logistics flow smoothly requires great coordination, organization, and excellent time management. Not all supply chains have the talent and capabilities necessary to ensure efficiency and, in those cases, betting on logistics companies is the best decision. These logistics partners have the technology, experience, contacts, and professionals that guarantee an impeccable customer service, reaching where it would otherwise be impossible.

How to make the most out of this Technology?

The test error method is not valid in an environment as competitive as the supply chain. Committing a failure can mean losing positioning and being displaced. And times of social media, any action or recklessness magnifies its repercussion, so it is worth moving forward on insurance.

On the other hand, when choosing logistics companies, we must bear in mind that not all offer the same services. Neither are the business models that result from the association similar, so, you can find:

  • 4PL (Fourth-Party Logistics Provider): it is an association model based on the generation of value. Normally, these logistics companies are established as supply chain partners and, from this position. Offers advanced services ranging from the generation and maintenance of strategic relationships. To the provision of technological capabilities or the sharing of knowledge.
  • LLP (Lead Logistics Provider): it is a contractual model, where risk is shared. A logistics company of this type can manage others at lower levels. Becoming the single point of contact with the supply chain. Its main value is technological integration.
  • 3PL (Third-Party Logistics Provider): the contract with one of the most frequently used logistics companies seeks to add value to the operations, thanks to the best of capabilities achieved through outsourcing.

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