Simply put, 3PL – which stands for “3rd-party logistics” – is a freight shipping model that allows companies to outsource their transport needs to tactical logistics firms. Let’s learn more about “What is 3PL” and how it can benefit you.
By using the 3PL model, shippers and manufacturers can rely on transportation professionals. They handle their freight so they can focus on growing their business. Additionally, 3PL offers a much more cost-effective solution and is one of the top services that is offered at KCH Transportation.
Let’s make a quick comparison of 3PL against two other common logistics models:
With the 1PL system, manufacturers plan and execute their own shipping strategies. They get their goods to warehouses, vendors, ports, and other destinations. Furthermore, 1PL requires you to have an in-house team of logistics employees. As well as own a fleet of vehicles, employ your own drivers, and manage the entire supply chain network.
You’re still required to manage the logistics in-house under a 2PL model. However, you hire external transportation companies and trucking companies to move your freight. Additionally, with this model, you may lose the sense of the actual cost of shipping. As well as you’ll have to manage relationships with a complete network of transport companies.
With 3PL, all logistics go through the planning phases for you. This is by a strategic partner, whose in-house logistics team will develop shipping solutions. Additionally, they will then match your needs with suitable carriers. Finally, 3PL providers act as trusted advisors who take care of the entire shipping process for you. Bringing you peace of mind, at a lower cost.
Benefits of using 3PL Providers:
- Reduced shipping costs:
3PL providers have strong relationships with freight carriers and can often get companies better rates based on volume and shipping frequencies. This is because 3PLs send carriers multiple customers, giving them more leverage than you would be dealing with them one-on-one.
- Reduced labor costs:
Working with a 3PL provider gives you access to their logistics team at a much lower price. Compared to hiring, training, and managing your own dedicated logistics staff.
- Expertise at your fingertips:
Your 3PL provider can answer all your transportation needs with one phone call. Meanwhile, you’ll have a team of seasoned logistics experts with all the experience you need. Our goal is to keep your products moving.
- Better agility:
If your business experiences seasonal fluctuations in demand, it offers flexible transportation solutions. Additionally, it can scale up or down as you need. This eliminates the need to commit capital to transportation when you don’t need to.
- Leverage 3PL software:
Purchasing dedicated logistics software and training staff to use it can be costly. 3PL already has the software and logistics team to help solve transportation issues. This can save you even more time and money.
- Improved customer experience:
Do vendors or customers need same-day or next-day shipping? these providers have a ready-made network that can help fulfill their needs. Better customer service leads to repeat sales and more revenue.
- Mitigate shipping risks:
Delayed shipments due to unforeseen circumstances? 3PL providers can respond with a ready solution that will get your cargo moving again.
The KCH Transportation Approach
We understand how important it is to build relationships with our customers. KCH wants to be your logistics partner, as much as your vendor. That’s why we focus on providing excellent customer service and complete solutions that address your transportation needs.
Whether you need expertise in safely managing hazardous materials, handling oversized shipments requiring permits and escorts, or moving time-critical loads, KCH Transportation takes care of every detail, so there are no last-minute surprises.