April 24th, 2013 || 
Are there any advantages to using a 3rd party logistics provider.. Paul Mckergee the guest author of this article seems to think so and explains why.. What are your views..?? 
SUMMARY: 3rd party logistics providers offer many benefits to their customers such as enhanced tracking and monitoring of shipping containers, integrated transportation and storage systems, and increased efficiency due to decreased paperwork and contract negotiations.
Shipping large items, multiple small items, or items of hazardous or fragile nature can be a time consuming and tedious task. The different regulations that exist on shipping these items and the logistics challenges of shipping in a global market place puts an unnecessary burden on businesses both large and small. Luckily, 3rd party logistics providers exist that can help ease the burden caused by shipping, thus allowing businesses to focus on their customers rather than on the hassle of shipping and storage.
3rd party logistics providers offer a number of benefits to ordinary shipping services. From handling pickup and delivery to ensuring that items are stored in a secure and climate controlled location, these services specialize not only in shipping, but in providing enhanced tracking services which ensure that cargo and freight arrive on time, every time. Some added benefits of contracting to a 3rd party logistics provider include:
Superior control of means of transportation. Because 3rd party logistics providers operate fleets of trucks and ships, and because they maintain multiple shipping ports and storage facilities, 3rd party logistics companies provide an integrated solution for pickup, shipping, storage, and delivery. This means that, rather than contract with multiple companies and services, business only contract with a single provider. This cuts down on paperwork, increases efficiency, and improves reliability.
Enhanced tracking and monitoring services. 3rd party logistics providers not only operate advanced shipping fleets but, also, they make use of cutting edge technology which allows them to monitor and track cargo in transit. This enhanced monitoring means that climate sensitive freight is sure to maintain a desired temperature, and the constant tracking features mean that up to the minute tracking information can be provided to their customers at any time. By constantly tracking and updating information, 3rd party logistics providers ensure that their transportation systems remain efficient, and customers can see where their cargo is at a glance and they can be notified immediately if shipping delays occur.
Secure, climate controlled storage. Not all cargo is ready for pick up as soon as it reaches a port or warehouse. From job site delays to regulatory quarantines, some items must be stored for a time before they can be picked up by their owners. Because of this, most 3rd party logistics providers operate multiple storage facilities in the regions in which they operate. This means that cargo can be held securely, and in climate controlled containers, until they are ready to be picked up or delivered.
From maintaining efficient, and fast shipping fleets which operate nationally, internationally, and globally to operating secure and climate controlled storage facilities, 3rd party logistics providers are a complete, end to end shipping service. Because they control the entire means of transportation and storage, they can save time on paperwork, and save money due to increased efficiency. This translates to less time wasted for business, and less money spent negotiating multiple shipping and storage contracts.
Bio: Paul Mckergee is a freelance writer for Spectrum Logistics. For more information and to see how 3rd party logistics providers can help you, visit www.spectrumlogistics.us, now..
Thanks a lot, sir!
Hi Paul,
Thank you for a good article. I agree there are many good things about using a 3PL, and I think you mention most of the benefits in the article.
Would like to add one more angle for the readers, which is the selection of 3PL. Many companies nowadays claim to be 3PLs and have cutting edge technology supporting a smooth end-to-end information, documentation and finance flow (cargo flow deliberately left out). But at the end of the day, it comes down to landed cost of the product and service reliability, and in my view, some 3PLs tend to forget that.
When identifying a 3PL for your logistics needs, I think it is imperative to clarify exactly what your needs are. Make clear metrics and success factors, and make sure that any additional feature you agree to in our supply chain design can move you towards the objective of your supply chain restructuring.
Also, do not forget to look deep into service reliability. Being 3rd party means depending on contracted carriers. Is the 3PL using reliable carriers in all the trades you require? Visibility is nice, but flawless service delivery is preferred.
Last point I wanted to add is the integration process. When selecting a 3PL, especially if going for a solution with all the bells and whistles, do not underestimate the work involved in setting up the supply chain metrics and transferring the physical flow of goods to a new provider. This would, in my opinion, be the single largest cost item and source of frustration, and requires significant investment of time from both parties. Clear project planning, strong project management and a dedicated team in the transition period.
Those were my five cents. Comments are most welcome.
Morten