3PL is third party logistics, in which a firm hire the third party to serve their logistics needs. The global supply chain has become complex in last two decade with the increase in industrialization. Now any economy will perish that will not be selling their product internationally because only serving the local demand will not increase the revenue. Also, the consumers are well aware of the product which they can browse on the internet. The eCommerce platforms like Amazon, Ali baba or eBay able to reach their customers in every country with the help of 3PL. The 3PL is the trend that has become important in the supply chain and with every passing day, it is becoming the backbone for the global supply chain. Seeing the benefits of 3PL, it is predicted that it is the future of global supply chain and will become an integral part of most of the businesses. The 3PL adds efficiency in the supply chain and reduce the cost of business operations. The 3PL helps to increase the reach for the company and have a positive impact on the company’s bottom line. The 3PL helps the company to serve its customer in the region that seems to be unreachable in past. The key benefits of 3PL are;
The prime reason companies switching to #pl because it drives cost savings. Because when you will be hiring the third party for the logistics services, then you will be paying for the services rendered by them. You don’t have to bear any fixed cost related to logistics like human resource, vehicles, warehouses. This drastically reduces the cost of business and also the liability decreases. The same investment can be made in areas to increase the production or marketing of the products.
The logistics business needs expertise and experienced staff. If any company is making a laptop, they might have expertise in manufacturing laptops but logistics will not be their core competency. Then why to get into the thing where you are not good. Hiring the competent 3PL partner will provide you with the services of an expert and experienced staff. They will be having all the right resources to do the job. The saves major capital expenditure and resources, the manufacturer can focus on their core competency.
Flexibility and Expansion:
3PL increase the speed of your supply chain and reachability. For example, if one company wants to penetrate the new region, then they need to build their logistics network first. But hiring the appropriate 3PL from the same region will help them to provide already existing network and this reduces the time to introduce the products in the same region. The 3PL partner will have better knowledge about the region and its requirement, so they can support in making your product successful in a particular region. This provides flexibility, where you can offer personalized services region wise.
The 3PL acts as your representative in a particular region. In case of a customer complaint, they can address the customer issue and provides replacement in lesser time. The customer always wants a better response time and with the help of 3PL, it is achievable.