Minimizing Freight Spend by Maximizing Relationships with Your 3PL Service Provider

By October 27, 2016No Comments

The annual 2016 state-of-the-union for 3PL Logistics paints an interesting picture for of today’s shipping, freight, logistics, and supply chain professionals. One of the most interesting takeaways is that shippers can cut transportation costs (which they listed as their greatest challenge for 2016) and improve customer service by partnering with the right 3PL Service Provider.

“The service that consumers have come to expect from retailers reverberates back up the supply chain. When shoppers want products fast, retailers need their shipments fast. Manufacturers need their supplies fast. Suppliers need their raw materials fast. Everything speeds up, all the way down the chain. A large part of customer service is reliability, and with the new pace and expectations set by the e-commerce age, reliability is one of the most valuable things that a 3PL can provide” (Inbound Logistics, 3PL Perspectives 2016).

As the US continues to recover from the great recession, the trucking industry remains an integral part of our economic recuperation. The annual report, released by Inbound Logistics notes that domestically, driver shortages, another potential trucking capacity crisis, presidential elections, underfunded and crumbling infrastructures, and the Trans-Pacific Trade Partnership make for an uneasy — or unsettled, at the very least — outlook.

Compounding our domestic issues, the international front doesn’t look a whole lot more predictable, the report observes that, “Across the pond, the population of the United Kingdom voted to leave the European Union, which sent markets plummeting and has the potential to turn the European supply chain upside down. Across the other pond, China seems headed for a recession, which will impact the entire Asian region and the world. In many regions, a growing consumer class is spurring opportunities for growth. Companies will need new skills, technology, and know-how to leverage this consumption uptick.”

All this uncertainty, however, actually leads shippers and companies to seek 3PLs with the expertise they need to help them navigate uncertain or uncharted waters. Shipping companies that lack the technology to keep up with today’s changing markets can rely on 3rd party logistics providers to provide the state-of-the-art cost-saving technologies they need to remain competitive in today’s uncertain environment.

The report notes, “Many shippers and manufacturers hire 3PLs specifically to tap into technologies that the shipper doesn’t have. As cloud networks and the Internet of Things connect each step in the supply chain, it becomes easier for providers to host and lend Software-as-a-Service technology to their clients. This saves the shipper from a large technology investment and helps the 3PL maintain value and service.”

Another way 3PL companies can minimize spending is by conducting pre-audits, as opposed to relying entirely the more common post-audit. This system of checks and balances allows companies to more efficiently track freight and maintain the accuracy of invoices and quotes, correcting mistakes before the potentially costly consequences come into play.

To find a 3PL provider that’s right for your company, look for a company that knows shipping (as opposed to exclusively touting carrier- or small package-based experience), that has a clear plan control spending, has experience with multiple modes of transportation, has experience with RFQ-RFP processes, that has a sense of the larger issues at play within the transportation industry, and that sees the big picture.

For more information about M&W Logistics Group and our logistics services, contact us today.