There’s no secret that customers are increasingly concerned with the risks associated with 3PL services. It’s especially true when it comes to the supply chain, where companies have their products and materials entrusted to third parties.
The supply chain has become complex. It’s because companies are striving to gain competitive merits in the market. With an increased number of 3PL providers, there is more room for disputes and lost revenue.
However, before we highlight the risks associated with 3PL, let’s understand it first.
Understanding 3PLs
Despite the risks speculated, 3PLs have a lot of benefits from partnering with e-commerce firms. They include the following:
- Increased capacity. E-commerce companies do experience high order volumes from different customers. Therefore, it is challenging for them to handle it on their own. That’s where 3PL comes in to aid in outsourcing their warehousing needs. Hence, they can focus more on selling and marketing instead of handling massive orders.
- Limited storage space. The storage demands of e-commerce firms are enormous. These companies need to store, pick and pack products for the hundreds of orders that come in every day. It’s therefore challenging for any company, especially small businesses or those just starting out. To handle these demands, outsourcing the storage needs to a third-party logistics provider is the best option.
- Advantage of delivery options. E-commerce firms often require added delivery options, for instance, same-day delivery and next-day delivery, among other services. The 3PLs can assist your business by providing solutions like drop shipping. This Is where orders are fulfilled directly by the manufacturer without any involvement from the retailer or e-commerce.
Now, let’s look at some of the risks customers might be worried about, but which can be overcome by choosing the right 3PL provider.
1. Risk of Late Deliveries
Late deliveries can seriously impact the customer’s business. Customers need to be able to rely on their suppliers for the timely delivery of their goods and services. Delays in delivery can hurt a business’s profitability and credibility, as well as its reputation among partners.
2. Confidentiality Breaches
In this digital era, it can be challenging to keep information secure, especially when outsourcing work to a third party. Suppose a 3PL employee has access to sensitive data; they could accidentally leak it or sell it on the black market.
This could expose your company to a range of potential legal issues and financial penalties. in case any confidential information gets into the wrong hands.
3. Rising Cost
Customers are worried about rising costs because they want to predict their expenses and avoid unknowns. Clients are interested in knowing what they’re getting into with a 3PL contract. Thus, they can ensure it won’t negatively impact their bottom line.
As a result, you need to show them how you can help them reduce costs through supply chain management services. For instance, visibility across all aspects of the supply chain from order fulfillment through transportation, distribution, and warehousing management services.
4. Environmental Concerns
Many customers are becoming more conscious of environmental impact and sustainability practices. Meaning they expect companies like yours to operate responsibly as well.
They may, therefore, choose a different supplier if they feel your firm isn’t taking these issues seriously. Or doing enough to protect the environment while delivering products efficiently and cost-effectively.
5. Inadequacy in Collaboration
Customers don’t want to be left in the dark about their shipments. Suppose you’re not communicating well with them; they might think something is wrong with their order or that it’s lost in transit. As a result, they’ll take their business elsewhere if this happens too often.
Learn More at M&W Logistics
As you can see, your customers are worried about a number of risks in the supply chain. Thankfully, that’s a forgotten issue when you’re with us. M&W Logistics is here to help you mitigate those risks and ensure that your customers know it.
With over 40 years of experience helping companies like yours manage their supply chain risks and meet their logistics needs, we are the ideal partner for your company. We have a reliable supply chain network that gives us access to every kind of transportation option needed to get your products where they need to be on time.
Our staff is dedicated to providing top-notch customer service, from inventory management and freight transit to climate-controlled warehousing. Our services can also be customized to meet your specification. So, if you’re worried about your supply chain, please contact M&W Logistics today and learn more!