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Many businesses across a broad range of industries use third party logistics (3PL) companies for their warehousing, packing and fulfillment activities. From retail to pharmaceuticals to manufacturing and electronics, many businesses are careful to choose the right 3PL company that suits their needs and grow a long-term working relationship with their 3PL provider. In fact, over 90 percent of the world's Fortune 500 companies use 3PL providers and Australia's leading third-party logistics provider B dynamic Logistics, cofounder and CEO, Mal Siriwardhane strongly recommends businesses who don't already have a 3PL company to do so. Businesses are able to achieve significant cost savings by partnering with a 3PL provider to warehouse and distribute their goods.
While Siriwardhane emphasises the benefits of 3PL he also warns that the key is to ensure that when a business outsources to a 3PL provider that they pick the right one for their business and their industry. Not all 3PL providers are equal - some are definitely better than others and a better fit than others. As more businesses look to embrace a 3PL partner there are some key considerations to address in order to ensure the partnership is mutually beneficial.
Why use a 3PL?
"There are many benefits of using a 3PL company. The main advantage is the cost savings for businesses because 3PL companies can help a business reduce shipping costs due to the sheer scale at which they operate at," Siriwardhane said.
"They can also save a business plenty of time and resources by managing the entire start to finish process of shipping: from warehousing and inventory management, to order fulfillment and tracking. Finally, a 3PL company can provide detailed information and valuable insights into a company's shipping operations, which in turn can help a business identify areas to improve and optimise."
Choosing the right 3PL for your business and industry
"If your business activities have reached a level where you are now requiring the services of a 3PL, what should you consider? Of course, you want to factor in things like high quality service and competitive pricing, but you also would want flexibility and scalability, as well as support when needed. Evaluate your logistics needs and do some research," he said.
Do your research
"Ask the right questions. The only way to find out if a 3PL provider has experience in your industry to ask for references from similar product categories and companies that are about the same size as yours. Ask also about vehicle types, carrier partnerships, package handling equipment and even peak season surcharges," Siriwardhane advised.
"Find about the provider's LTL vs TL capabilities: less than truckload vs truckload. LTL shipping refers to smaller volume freighting that won't take up the entire available space of a truck. This is more relevant to small and medium sized businesses that don't own their own trucks and can't afford truckload shipping, so the truckload would be shared with other companies. The drawback of this is of course, with multiple pickups and stops, shipment will take longer. On the other hand, TL shipping, sometimes known as FTL or full truckload is an economical shipping option if product volumes can fill up the entire truck."
Scalability: why it matters
"It's very important that your 3PL provider is flexible in its solutions and offers scalability. You must find out whether your chosen 3PL can withstand economic downturns or sudden growth in your company," he said.
"Check financial health, insurance ratings, backbone customer retention and how the 3PL scales resources up or cuts costs during volatile periods without affecting service. Large, well-established providers tend to be more resilient partners."
Other key points to consider
"Consider key factors like location, facility specs, value-add services, technology integrations, labour resources and total cost of ownership. This will help you find the right strategic 3PL warehouse solution tailored to your exact business needs both now and as your company evolves over time. Conducting thorough vendor evaluation and due diligence upfront will save headaches—and money—in the long run," Siriwardhane said.
"In today's fast-paced business world, companies are always looking for ways to optimise their operations and reduce costs. One of the most effective ways to do this is by utilising a 3PL provider. When choosing a provider, a business will have to evaluate the provider's reputation, location, capacity, services and technology. Finding the right provider for your business will prove to be an invaluable partner in the management and optimisation of your business."
B dynamic Advantage
B dynamic Logistics has developed the industry's leading middleware software called 'B dynamic Advantage'. The solution connects to customer systems, warehouse management systems and transporter systems, providing customers with extensive integration options, custom data feeds, business intelligence, dashboards, reporting and so on.
About B dynamic Logistics
B dynamic Logistics is part of the B dynamic Group. B Dynamic Logistics is Australia's leading one stop shop for ecommerce enablement and third-party logistics. B dynamic Logistics works with businesses to design and develop customised online stores, integrate flexible logistics solutions and provide pick, pack and delivery services to their customers.
The B dynamic Group was created in 2005 and currently distributes products for over 100 iconic retail brands and is one of Australia's fastest growing logistics companies. The company has multiple sites in New South Wales and has now expanded its footprint into Queensland with a mega facility in Brisbane.
Tess Sanders Lazarus
Invigorate PR
[email protected]
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