Contrary to popular opinion, bigger is not always better. This may be particularly true when it comes to choosing a third-party logistics (3PL) provider. Large companies may be too distracted to give you the customized attention you need. Smaller companies may struggle to provide necessary products and services. A mid-sized company may be just the right fit. Below are some of the advantages of that choice.Regional Presence
Transit times can substantially affect bottom line costs. Additionally, we are still seeing delays due to COVID-19. Utilizing a central distribution point makes good sense. Ideally, a regional company will have multiple facilities and be able to provide national coverage if needed. They will have established relationships with other suppliers and carriers. There may be freight savings by combining loads with other clients.
A regional provider may also be better equipped to service a particular industry or product. This is particularly true if you have a niche product.
Nicole Emmerich, writing for ITS Logistics, describes steps for choosing a 3PL. Asking how well a company can meet your specific needs is at the top of her list. The importance of being able to speak with someone who knows your company and is genuinely interested in making sure your goals are met should not be overlooked. Your representative should be expected to provide answers that are most effective and efficient for your business. Once the account is established, they may even be able to suggest process improvements or alternative ways to enhance your fulfillment programs.
The benefits of this relationship cannot be discounted. If built on trust and transparency, communication and responsiveness will be a given. You can be assured that your company is getting the best solution for your unique needs. A mid-size company is also better able to provide flexibility when your requirements change. They will be able to grow with you and be as committed to your brand image as you are.
Face it – a small company may not have the resources to offer advanced information systems (IT). In contrast, most mid-sized companies have made the switch to inventory management software (IMS) that connects all the key components of the distribution process, with insights into ordering, inventory, and fulfillment. System integration ensures this transparency is readily made available to the client.
The power of automation is likely being harnessed in mid-sized companies. Time and resources can be saved by implementing warehouse management systems (WMS) for tasks that are repeatable. They use key performance indicators (KPIs) to set standards that provide a baseline for process improvement. It is all about efficiency.
Many mid-sized 3PLs have been in business for years and have been around the block. Most started small and have grown with their clients. They are established and reliable. Many have multi-channel capabilities, operating in both business-to-consumer (B2C) and business-to-business (B2B) arenas. Chances are they have had the opportunity to interact with a wide variety of manufacturers and distributors. This leads to proficiency regarding different types of products, storage, containers, transportation options, delivery schedules, and load sizes.
The value-added services these 3PLs offer have developed out of the need to keep up with the demand and remain competitive. Sampling, promotions, customer care, kitting and assembly, and reverse logistics are just some of these possible services.
Choosing a 3PL partner is an important decision. As discussed, larger is not always better in this case. Look for a provider that can provide the services you need, but one that is also committed to being transparent and available.
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