3PL Cost Reduction Strategies

3PL Cost Reduction Strategies

Efficiency can make a huge difference to both your profit margins and your customer satisfaction as a business. The more efficient the systems you put in place are, the more you will be able to increase turnover and minimize mistakes and problems.

This doesn’t just apply to the processes a company handles itself, but also those services carried out by third parties. For example, if you can find ways to reduce the costs of 3PL (third party logistics), then you will be able to save money and reduce errors. In this post, we will look at some of these 3PL cost reduction strategies!

3PL Cost Reduction Strategies

Use a Full-Service Company

A full-service 3PL company is one that doesn’t just offer one aspect of your freight, but rather the whole thing. In some cases, a single company will provide inventory management, transport, material sourcing, production scheduling, outbound freight, warehousing, customer service, delivery, and more!

This huge slew of services means that you only need to communicate with a single company. If you have a separate company providing a warehouse and another offering freight forwarding and YET ANOTHER offering delivery, then you create far more opportunities for things to go wrong.

If something goes missing, you’ll often not know where to even start to track it down! Likewise, the cost of getting multiple companies to work together is often much more expensive. Even just the number of calls you will need to make will represent a large expense and a lot of time wasted.

Do Your Bit

While a full-service company can do an awful lot to handle your delivery and storage for you, it won’t be able to work miracles! At the very least, it will be your job to ensure you are providing great products and terms and conditions for your customers. This can then impact on your efficiency.

For example: if you have a poor product that breaks down a lot, or if your product description is inaccurate, then you will get lots of returns. This will then create more work for your 3PL company, and with the best will in the world, that is going to cost you more AND increase the chances for things to go wrong.

Likewise, you might be required to print labels, or at least retrieve identification number. Create efficient systems to handle this, so that all your 3PL company needs to worry about is doing its job!

Choose Wisely

This should go without saying, but of course, it is highly important that you always pick a company that you can trust to do a good job with your 3PL needs. Choose poorly and the company will be likely to charge you more, make more mistakes, and generally offer a worse service. All of this will mean you end up spending more, upsetting customers, and dealing with a lot more admin and communication overhead yourself.

Do your research, read reviews, and always speak with a representative before settling on a 3PL company!

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