The Disadvantages of Hiring a Third Party Logistics Service


Whether your company ships its products locally, nationally or globally, the price that it pays for shipping depends heavily on logistics. From fuel surcharges to warehouse fees, logistics management focuses on every aspect of the shipping process in an attempt to accomplish two things: the delivery of products in a shorter period of time and the delivery of products at the lowest cost of shipping. To accomplish these goals, many companies turn to a third party logistics service (3PL); a company that works with small to midsized companies to transport their freight by land, sea or air. In most cases, 3PL’s make the majority of their profits by consolidating freight from different companies and receiving discounts from less than truckload carriers (LTL), airlines or expedited shipping companies, meaning that 3PL’s essentially profit from not passing discounts on to their customers. Nevertheless, 3PL companies do provide an essential service for companies that can’t afford their own shipping fleet or full truckload shipping (FTL). In fact, the only way that most small to midsized companies could do without 3PL is if they had the ability to conduct their own freight logistics.

Today, small to midsized companies have this ability when they choose freight logistics software over hiring a 3PL. Freight logistics software-also referred to as freight transportation software-has several advantages compared to 3PL, with the most obvious one being price difference. Freight transportation software is an online computer application and is priced accordingly, whereas 3PL providers serve as logistics experts and cost significantly more. Another financial advantage of freight transportation software is that you aren’t dealing with a logistics provider that makes money off of the price differential between what you pay for logistics and the actual cost of shipping your goods; instead, you’re dealing with a freight logistics software company that makes money by providing a software application for a monthly fee, which essentially means that you cut out the middle man and reap the full financial benefit of logistics.

Although 3PL providers do help companies ship their goods in a timelier, less expensive manner than if they shipped their goods using parcel carriers or FTL providers, 3PL nonetheless profits off of companies whose size necessitates that they look for the most affordable shipping options, including the price required to discover and secure those options. By using freight transportation software, small to midsized companies can realize the same logistical benefits provided by a third party logistics service at a significantly lower price, as well as exert more control over the logistics process. As an online software application, freight transportation software can be accessed from any online computer terminal, allowing each of company’s departments to apply its expertise. Whether you ship your products locally, nationally or globally, freight transportation software puts the power of logistics in your hands in an easy to understand module, allowing your company to reduce its shipping costs by as much as 10 percent after the first year of use.

Source by Ruby Stein

Tags: No tags

Comments are closed.