How a 3PL can Help with the Capacity Crunch?

There are an estimated 3.5 million truck drivers in the United States alone. Truck drivers and freight carries drive the flow of worldwide industry, and the capacity crunch has managed to give the industry a major knock felt by everyone behind the wheel.

Could the solution to the capacity crunch be 3PL? Here’s what it means, and what it means for the industry.

Explaining the Capacity Crunch

The Capacity Crunch happens when the capacity – that is, supply and demand for the industry – cannot be met. This takes place when the trucker no longer has access to enough trucks or enough space to transport their cargo. The demand for truckers remains, but now the truck cannot be filled to capacity – so transport becomes impossible, or more expensive.

Causes of the Capacity Crunch

There are many contributing factors to the capacity crunch. A sudden rise in the retail industry can be part of this; so can sudden changes in the stock market. It stretches further into the industry, and can even lead to large-scale job losses for those who make a living from transporting goods. In itself, this creates a shortage of drivers: And this only increases the scale of the problem.

Explaining a 3PL

3PL is short for Third Party Logistics, though it’s sometimes also referred to as TPL, and it’s much less complicated than you think. Third Party Logistics involves bringing a third-party on-board the business – and the third party undertakes the job of managing distribution. This means the pressure that’s placed on the single company is now much less.

The Benefits of 3PL

Third Party Logistics can hold many benefits for your business in the midst of the capacity crunch. In short, third party logistics outsources the business to another – this becomes a combined force, and manages to make the capacity crunch almost obsolete. This isn’t the only benefit of third party logistics.

Inevitably, 3PL also leads to more job creation in the industry, a reduction of pressure on other businesses in the midst of a capacity crunch. It will also ensure that the sectors of distribution and retail remain largely unaffected by the capacity crunch in the case of a serious emergency where the demand can no longer meet the supply.

Collaboration

Third Party Logistics also encourages collaboration between business ventures – and could save a sinking business that was on the path downwards before 3PL happened.

And it’s not just for the transport industry either: 3PL has been proven to work stretching over several industries. Would you consider it as an option?

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