As a business expands and begins to deliver more products and services to more customers, they must decide whether to outsource its shipping and fulfillment operations. Businesses rely on the supply chain for outsourcing many aspects of their logistics functions, such as distribution, transportation, warehousing, packing, inventory forecasting and fulfillment services. When the processes function properly, customer satisfaction is improved.
Satisfied customers are the backbone of any e-Commerce company and shipment delays, missing items, damaged goods or other problems, can damage this satisfaction. For this reason, it is imperative that third-party logistics improve customer satisfaction to keep all levels of the supply chain happy and working flawlessly.
What is Third-Party Logistics?
Third-party logistics (abbreviated to 3PL) companies offer logistics services and support some or all aspects of a business’s shipping operations, managing all aspects of moving goods from manufacturers and distributors to the end customer. It can consist of a full range of goods-in, storage, distribution and order satisfaction – so that your business can focus on what it does best and grow faster.
Efficient logistics are critical in the face of complex supply chains, just-in-time production, short lead times and high consumer demand. As more people choose to shop online, it is more important than ever to find a cost-effective and efficient logistics solution.
By maximizing efficiencies and streamlining processes, businesses outsourcing to a trusted 3PL partner can become more competitive while focusing their attention more on their own product development and success in an increasingly competitive marketplace. For these reasons, a 3PL is usually integrated within a company’s warehouse management and transportation operations for a comprehensive delivery workflow.
A 3PL is commonly used in outsourced logistics and supply-chain management to outsource a company’s shipping and fulfillment services, which can include:
- Transportation
- Warehousing
- Materials procurement
- Inventory management
- Customs brokerage
- Freight audit
- Payment
- Shipment tracking
Four Functions of 3PL Providers
- Shipping and Receiving
Full truckload (FTL) and less than truckload (LTL) freight can be essential tools to save you money on freight. This is particularly true if you often ship large orders to commercial customers or wholesale orders to retailers. You can also use freight services to ship your products between warehouses or to a distribution point closer to your customers. Your outsourced logistics company can guide you through this process. It can arrange for FTL or LTL loads and process incoming truckload freight. Your 3PL can also help you find the best deals and the right service level for your freight shipping.
- Transportation
A 3PL does more than just book your company’s freight—it acts as an extension of your transportation department. In some cases, the 3PL may manage all of a client company’s transportation functions. A third-party logistics provider will have a complete understanding of a client’s shipping, demand cycle and supply chain. enables the 3PL to optimize loads, identify efficiencies, forecast freight fluctuations and reduce transportation costs. The 3PL can be a strategic partner that is constantly auditing freight performance, providing greater visibility to a client’s supply chain, and making it easier to spot overspending, delays and other inefficiencies.
- Warehousing
For any growing company that makes and sells products, figuring out how to store and track your inventory is a major question. Often, it’s smart to leave this important task to the experts. A third-party logistics (3PL) company will have the expertise to provide reliable warehousing and storage.
Businesses seeking 3PL services are not only looking for customized 3PL warehouse solutions, but a mutually beneficial relationship with the provider. Because a 3PL company can provide a range of specialized services outside of your core competencies, outsourcing your warehousing and logistics needs can actually save you money in the long run.
- Distribution
The capability to store your inventory in the 3PL provider’s network of warehouses to ensure your products are strategically positioned in locations as near as possible to your customers or other facilities – so that they can be successfully distributed to meet demand. Many 3PL organizations also provide a wide variety of distribution and wholesale services, including outbound order fulfillment, picking and packing, custom labeling, and manufacturing.
How Do Third-Party Logistics Improve Customer Satisfaction?
Today’s customers expect a seamless shopping experience – online, mobile catalog, etc. Studies show that 90 percent of consumers expect a consistent customer experience across channels and devices when they interact with brands. They are also looking for a variety of delivery and store pick-up options.
When customers shop online, they expect to see if products they want are available – in store and online – and when they will receive them. In fact, 80 percent of consumers are less inclined to visit a retailer’s physical store when the website does not include current product availability. When orders arrive, customers expect to receive the item, quantity and color they requested.
- Efficiency
As the business landscape continues to change dramatically, companies of all sizes and levels are looking for different ways to improve efficiency, minimize risks and save time and money. Whether it’s a start-up company looking to gain market share locally, or a Fortune 500 giant wanting to take another step forward this year, business leaders and decision makers are surely looking for ways to do all of the above. There are also “pain points”, or “school fees” as a perspective partner explained them to me, that every company goes through as they grow and their dynamics begin to change. Working with a 3PL also leaves clients with peace of mind knowing that they can meet their customer’s demands at any time. Clients can grow or shrink the amount of product they have in our warehouse due to the demand of an item at any given time.
- Focus
Logistics can be a distraction from a company’s primary business because it needs company resources and effort to organize the complex but standard business function. Logistics companies specializing in transportation, warehousing and inventory management will help you focus on other things that will help you to enhance customer satisfaction. They can focus on their abilities while you focus on increasing customer satisfaction in making a quality product. When the staff no longer has to deal with trucking companies and tracking inventory, it can spend more time making sure customers receive top-quality products and excellent service.
- Flexibility
In order to offer the best 3PL shipping experience, you have to have flexibility. A successful 3PL cannot be run rigidly that sticks to a set schedule without budging an inch. The supply chain is full of chaos in indetermination, things are always changing. Because of this, if you want be successful, you have to be flexible. This means being able to change things at the last minute to help out a customer or carrier. It also means being able to go from working on a cross-country van load to an expedited local reefer without losing a beat. Flexibility in 3PL shipping is doing whatever it takes to provide the best shipping experience for your customer. Flexibility provides the best 3PL shipping experience by improving customer relations, continuously implementing improved processes, offering a wider array of services.
- Information Technology
Information technology allows tracking shipments, materials and products both on the supply side and the delivery side of the operations. Such systems are costly and need to train technical personnel to maintain and update. Third-party logistics companies can provide you with data on the location of critical deliveries and let you plan your production with more excellent reliability. Tracking deliveries to consumers is more efficient. The resulting streamlined operations put customers’ hands quickly and reliably while allowing quick problem diagnosis and a satisfactory resolution.
Choosing the Right 3PL Partner for Your Business
Your reputation is on the line when it comes to order fulfillment. Your customers expect a certain level of professionalism and choosing an inexperienced fulfillment company could tarnish your brand reputation. Instead, you want to partner with an established, reputable company that has years of proven experience and staff that is trained and knowledgeable in all areas of the business, from their call center specialists and fulfillment operators to their technical staff. Ask for customer references and testimonials to see what their clients value. You should also visit their facility and meet the entire team.
There are countless fulfillment companies out there – and most will claim to be able to meet your every need and will extend a promise to ship your products accurately and on time. But there is nothing more important than insights; do the math to make sure you choose a company that is knowledgeable about your industry, or ideally, already have several clients operating in the same field as you. They need to understand you, your brand and your business model. Make sure the skills they bring to the table meet what your brand.
Getting your product where it needs to be – on time, every time, accurately, and cost-effectively – is what provides your customers a great brand experience. To do this, you need to rely on major shipping carriers. Transportation costs have skyrocketed in recent years, but PFC can help keep those costs in check. Our multi-modal transportation capabilities offer an end-to-end (3PL) third-party logistics management solution for your supply chain and get you the most cost-effective, true transit times for your parcels.
The FLEX Logistics Team is Here to Help!
With stiff competition, creating customer satisfaction has never been more crucial to ensure long-term success. If customers believe they are paying too much for services then they will start shopping around. They might opt to go with your competition if they find another 3PL with a more appealing deal or innovative tech services.
Our team understands the importance of getting your products to the market. That is why we aim to understand your business and build lasting relationships with you and your team. Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.
Contact us today to discuss your current and future warehousing and logistics needs. We will work together with you to understand your requirements and develop a solution that will set you up for future success.