How Does a Third Party Logistics Company Work?
What is a Third Party Logistics Company?
A third party logistics company is an organization that outsources shipping, storage, and distribution through a vast network of shippers and owner operators. A third party logistics company has access and connections to resources unavailable to most companies. A 3PL’s goal is to streamline nationwide shipping processes to minimize the costs for shippers and motor carriers alike.
3PL Companies Adopt Many Different Roles
The overall role that the third party logistics company plays can range anywhere from a single part of the overall logistics operation to comprehensive “point of origin to point of consumption” transportation management services. Third Party Logistics companies can operate small distribution areas and focus on a specialty market, or they can ship anything you want globally. Different companies have different specialty fields, therefore, they tend to direct their business towards a specialized niche.
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How a 3PL Like Direct Drive Logistics Saves You Money
A 3PL company saves you money just like any other business. It provides a service you’re most likely better off outsourcing.
Your brakes are grinding. Every time you come to a stop, you cringe and hope for the best. The brake pads need changing. You same a few bucks by replacing them yourself. You aren’t a brakes expert, but you know worn brake pads when you hear them.
A month later, your brakes grind. Why? It’s only been a month! You change them again. It seems fine, until another month later the brakes grind yet again. You finally decide to take it into the shop to get it checked out, because obviously changing the brake pads isn’t solving the problem.
The mechanic informs you the calipers are stuck and need to be replaced. You tried to save some money by solving the problem on your own, but ended up unnecessarily wasting time and money.
Option 1: Keep It In-House
- Replace the pads yourself: a couple hours of your time + the cost for the pads.
- Replace the pads again a month later. Same costs.
- Take it in to the shop to diagnose the real problem. You need new calipers. And another set of brake pads.
Total Costs
All those hours of labor running back and forth to the auto shop and swapping out 2 sets of brake pads in your valuable free time, costs for new calipers, pads and professional repair.
Option 2: Go Pro
- Take the car to the shop and pay a professional to diagnose and repair.
Total Costs
Costs for new calipers, pads and professional repair.
3PL Companies Afford You Time You Never Thought You Had
DIY care doesn’t always turn out to be so expensive, but only if you know what you’re doing. A car owner who’s never looked beneath the hood is to DIY brake care what most business owners are to a supply chain management operation.
The cost that’s difficult to estimate here is the time. What could you, as a business owner, have done with that time lost on inefficient solutions? Could you have been investing more energy into growing your business? Devoting more time to client care and procuring more leads? The options are endless.
Inside the Logistics Distribution and Supply Chain
Thanks to the ingenuity of professional logistics experts and an explosion in technological innovation, the logistics industry is constantly evolving to satisfy the needs of today’s booming global economy. Companies like Direct Drive Logistics are constantly searching for both logistics freight solutions and distribution specialists that will provide customers with worldwide shipping and warehousing alternatives that are dependable, professional, and competitively priced.
Third party logistics companies must keep in constant communication to ensure timely shipment.
Describing the actual logistics business, however, can be something of a challenge. Think of third party logistics firms as real-estate companies of sorts. Many business owners, small companies, and other organizations may be extremely intelligent and have extensive knowledge in their fields.
However, this does not make them experts in complex business operations that are essential to progress and profit. Juggling every aspect of your business’s finances becomes chaos as you grow larger.
Third Party Logistics Companies Have a Broad Reach
Logistics brokers have extensive pools of contacts right at their fingertips that can simplify operations substantially. Logistics firms will utilize their available resources to negotiate specific terms with these associates, and their entire logistics teams can use their combined knowledge to set up external transportation, storage, and distribution structures that companies or individuals would not be able to achieve on their own.
That may sound like a pretty complex explanation, and this is because there really is no simple way to put it. Companies not only hire 3PL specialists for their expertise, but they also rely on them to unload a huge personal burden.
Handling Shipping Problems You Shouldn’t Have to Worry About
As if producing quality products, worrying about employee satisfaction, client happiness, and budget management were not enough, imagine throwing inventory storage, shipping (along with making sure orders are on time, undamaged, etc.), and distribution on top of this nightmare.
Logistic specialists work to effectively set up supply and distribution chains made up of an array of different sources. For many clients, simply writing a check in order to achieve these results is much more appealing than spending hours of research and thousands of dollars in manpower in order to end up with supply lines that siphon your revenue.
Logistics Planning and Marketing Analysts
The level of planning that logistics technicians have to engage in astronomical. The broader the range of shipment and services, the more involved it gets. Many times, an entire team is actually required to get from point A to point B.
Every part of the logistics supply line works together like the gears of a machine. Just one malfunctioning part can lead to an entire breakdown.
Shipping may seem simple, but when you think about it closely—what about cargo that needs to be refrigerated? What about an oversized flatbed load that require special permits and licensing qualifications? Maybe the client needs expedited services that aren’t available, leaving you to patch together your own speedy shipment method. Where would you start the process?
This is why many budding logistic companies end up going under. In this line of work, the quantity of work combined with a good sized operation is huge. Competent nationwide firms like Direct Drive logistics are able to create more partnerships, make more contacts, provide more extensive services (statewide vs. nationwide vs. worldwide shipping for example), and ultimately price their services at much lower rates.
Direct Drive Logistics is Your Indispensable Business Partner
Direct Drive Logistics, as a true 3PL partner, is a crucial anchor of your business operation. Hand us the reins to your logistics management system, watch your operation streamline and use the extra time and money to grow your business NOW.
