Page 13 - Logistics News - August 2021

TH O UGHT LEAD ERS HIP

3PLs versus 4PLs How to choose a 3PL partner
Both 3PLs and 4PLs take care of inventory management, Choosing the right 3PL partner for your business
warehousing and transportation or execution logistics. involves several considerations, and it’s important
However, they have their differences: to not focus on a single metric such as cost alone.
To that end, think through the following list when
• 3PLs researching and talking to potential partners:
Third-party logistics partners only focus on the outsourced
operations of order fulfilment and transportation. In • Security
essence, 3PLs act as the subcontractor to an enterprise Not only should your 3PL have all necessary safety
or company that maintains managerial oversight, but training and compliances for its employees, it should
outsources the inventory management and fulfilment also ensure protection of your data and resources.
logistics of the orders. Partners who have certifications will take safety and
security seriously.
• 4PLs
A fourth-party logistics partner handles the oversight of the • Good customer service
logistics process in addition to everything a 3PL does. Most Part of a healthy business relationship is respect
often, companies that choose to use a 4PL want the partner and good customer service. 3PLs with eager-to-help,
to offer strategic insight on and handle the entirety of the creative, problem-solving team members can save
supply chain. 3PLs tend to be more transactional focused, you money and provide an enjoyable working
whereas 4PLs aim to offer complete coordination of vendors relationship.
in the supply chain at the best value.
• Scalability
Benefits of using a 3PL It’s important to plan for the future and choose a
Businesses looking to use a 3PL can expect many benefits 3PL that can handle your expected growth. All other
from the partnership, including: factors considered, the 3PL you choose should be able
to propel your business forward and keep up with
• Gaining expertise. Businesses working with a 3PL can constant growth, not struggle to keep up.
gain valuable insight to potential issues when shipping,
make connections in the industry, learn how to better • Customisation
streamline processes and more. For e-commerce companies Depending on your industry, you may need varying
with international business, working with a 3PL also levels of customisation for your business. Ensure your
removes the stress of attempting to learn and comply with chosen 3PL partner knows exactly what you expect
international shipping regulations. when it comes to customisation, whether it’s multi-
channel capacity or customer experience.
• Saving time and money. Some of the most valuable benefits
of working with a 3PL revolve around the efficiency and • Compatible technology
effectiveness of their knowledge to save you money. Along with scalability and customisation, ensure the
Outsourcing inventory management tasks to a 3PL 3PL has enterprise-level technology to keep up with
streamlines the work and allows you to focus on other your business’s demands, needs and changes. It’s also
aspects of your business. In addition, your 3PL partner important that the 3PL has a knowledgeable IT team
can identify potential costly issues in the supply chain and to help troubleshoot any issues.
proactively work to mitigate the risks.
• Positive reputation
• Scaling operations. Partnering with a 3PL remains a vital The right 3PL partner not only meets all of your
step in scaling a business. With a 3PL’s help, companies current and future business needs, but also has a
can expand their reach for order fulfilment, have easier positive reputation in the industry. 3PL partners L O GI S T I CS NEWS
seasonal transitions, save money on resources and labour, can connect you with a larger network of vendors
and use reclaimed time to focus on business and product such as marketing agencies, packing vendors and
development. more. •

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