Why Partnering With a 3PL Makes Sense For SMB’s

When it comes to moving freight, small and mid-sized businesses are no longer at a disadvantage to large corporations (large businesses had more scale, expertise and budget in the past). In this article, Millennium Logistics Management helps us understand why partnering with a third-party logistics company (3PL) makes sense for small and mid-sized businesses.

Small and mid-sized businesses are companies that consist of 1,000 employees or less and/or companies with revenues of $500 million or less. Today, companies of all sizes are able to set the bar high by increasing visibility, accuracy and cost efficiency through the use of the supply chain as a competitive tool.

More specifically, when small and mid-sized businesses (SMBs) are looking to achieve improved performance, cost savings, visibility, better service and information, they implement technology changes through third-party logistics (3PL). This partnership can net savings significantly on freight spend. Centralized technology and outsourced transportation are the keys to saving!

A third-party logistics offers not only solutions but also expertise without having to commit to significant internal investments. Some of the things small and mid-sized businesses may turn to 3PLs for includes:

• Infrastructure
• Scale
• Carrier Relationships
• Network Design 
• Transportation Solutions
• Buying Power
• Technology

One of the issues many SMBs face is having to pay late delivery fees and charge-backs to retailers because they lack proper visibility into inventory and product movement. These types of issues must be addressed immediately and by addressing them with technology, it allows companies to allocate their inventory more efficiently as well as meet fill rates and delivery times. Additionally, companies are able to avoid charge-backs while keeping customers happy.

In order to leverage technology effectively, it is best for small and mid-sized businesses to partner with a third-party logistics. Doing so will provide these businesses with instant access to transportation data that allows them to make more informed decisions (while detecting trends and analyzing costs).

Of course, there are many advantages when partnering with a third party logistics, especially when there are surges in demand because a third-party logistics has the ability to fulfill the needed capacity and generate performance metrics. Also, small and mid-sized businesses generally continue a partnership with a third-party logistics in order to shorten cycle times, gain insight from technology and reduce transportation costs.

There are so many reasons why it makes sense for small and mid-sized businesses to partner up with a third-party logistics. Millennium Logistics Management has been providing corporations with the logistical expertise, guidance and solutions to establish programs that produce major savings. Contact us today for more information about our supply chain and logistics services!