Benefits of Using Logistics Service Providers in Warehouses


October 24, 2019
7 MIN READ
Angelo Castelda
Written by:
Angelo Castelda
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Warehouse spaces are vast spaces or facilities where businesses can store large amounts of goods, products, and items, which all have costs associated with the company. These are considered one of the company’s most significant assets; hence, it needs a separate place for storage, inventory, and safekeeping. Warehouses require so many criteria, such as large spaces, ventilation, lighting, and such. LSCR warehouses are actually one of the most renowned warehouse spaces in all of Kansas City, providing all the basic needs of a warehouse for renters. So if you’re on the hunt for a facility, then you might want to check that out.

The warehouse industry has never been more popular. Over the years, it continues to thrive as customer demands constantly rise with the need for spaces and facilities increasing at such a rapid rate. This is all thanks to the growing demands and sales of the e-commerce industry. As warehouse demands continue to accelerate, more and more businesses are also in constant lookout for ways on how to improve their services to serve customers better.

Some of these warehouse trends that help businesses ease operations include warehouse technologies, robotics, digital transformation efforts, and warehouse management systems, to name a few. Given all these, warehouse operations are then simplified, while workers also reduce accidents and risks. More than that, it helps lessen or entirely eliminate warehouse delays, product damages, and errors. However, if you think warehouse trends stop there, it actually doesn’t. In fact, one of the most effective, and, not to mention, one of the most adopted methods in warehouses is the utilization of logistics service providers. What are the benefits of using logistics service providers in warehouses, you ask? Well, first, let’s break it down by defining what a logistics service provider is in the first place:

What Are Logistics Service Providers?

Logistics service providers or third-party logistics providers (3PL) are those that fulfill your orders. As a retail or e-commerce company, you take the orders, and then your third-party logistics provider fills it in.

It’s actually that simple. 3PLs are links in the entire supply chain to which brands can outsource only a segment or the whole business’ distribution and order-filling services. If done seamlessly, customers won’t even think for a second about the entire process of fulfilling, distributing, and receiving orders.

The growth of the e-commerce industry has made it possible for 3PLs to receive an influx of demands, given that almost 96% of companies today use third-party logistics service providers like this.

Before knowing the different benefits 3PLs can do to your business, you might want to ask yourself if you’re really in it for such commitment. Partnering with third-party logistics service providers is not a walk in the park, for it needs constant checking and thorough financing or budget-handling.

When Should Businesses Engage With Logistics Service Providers?

Now is the best time to do so! Whether you’re a startup business or not, I highly encourage you to enlist with 3PLs as soon as possible. Don’t wait until you’re overwhelmed by the inrush of customer demands and order growth because things may seem quite challenging after that. After all, breaking your order-fulfilling methods and promises to consumers can permanently damage your brand.

Here are three key questions you should ask yourself when you’re in the middle of deciding whether or not to hire a logistics service provider:

1. Am I carrying out over 20 orders each day?

If your answer is yes, you should actually start calculating the possible expenses of partnering with a logistics service provider so as to keep all your income borders as secure as possible. In the same way, you might as well estimate your growth potential by outsourcing your order fulfillment.

2. Am I running out of inventory storage space?

More often than not, companies tend to forget to include storage costs in an entire fulfillment expense calculation. With that, try comparing your current expenses with the different bids or estimates from third-party logistics service providers. After that, try to determine which is better: spending on extra storage or outsourcing order fulfillment duties?

3. Have we become a coiled spring?

If you’re currently in a state of experiencing a continuous spike in order demands and volume, and not just a one-time bigtime sales and marketing promotion effect, then begin estimating costs and other necessary expenses to meet the needs yourself. Then, compare all these with the cost of an outsourced fulfillment and determine which is best for the business–finance- and operations-wise.

Benefits of Using Logistics Service Providers in Warehouses

Outsourcing order fulfillment can make things easier for you and the entire warehouse operations. It allows you to focus on the rest of all warehouse operations and systems that need more attention, and spend even more time growing your business instead of moving around packages. Here are some of the best benefits 3PLs can give warehousing businesses:

Save Time, Money, and Risks

Outsourcing your logistics or order fulfillment can save you loads of time, money, and risks. Partnering with a 3PL provider helps you eliminate expenses for added warehouse storage, technology, transportation, and distribution. Basically, it also saves you so much time in the whole logistics process. It also reduces risks involved in operations, which enables you to focus on the core parts of your business.

Access To Technology

Warehouse fulfillment providers such as 3PLs highly depend on the latest technology concerning transportation and warehouse management so as to provide better service to customers and a seamless overall logistics management. Not only will companies benefit from this, but customers as well. They can have 24/7 access to tracking information regarding their orders.

Improved Customer Service

As mentioned, customers can have access to information and track their orders. With third-party logistics service providers, customer satisfaction is greatly increased by preventing scheduling issues, downtime, and vendor chargebacks. 3PLs usually guarantee quality delivery and drivers that ensure an excellent first point of contact with all your customers.

Scalability

3PLs can easily scale up or down and are flexible, depending on the current demands your company needs to meet.

Logistics service providers are actually built to meet whatever a company’s needs are, so they are able to manage time-sensitive deliveries and adjust operations in the entire supply chain. For example, you need to make a few adjustments because of new strategic actions and solutions, your outsourced service provider will, without a doubt, be able to adjust as quickly as possible to get in line with both you and your consumers’ demands.

Also, as your business grows, so will your 3PL’s ability to scale accordingly, so it’s a win-win situation.

Wrapping Up

The good thing about third-party logistics service providers is its dedicated platform and fixed cost, allowing you to customize or manage your logistics while also reducing risks with full control over your income and savings. Partnering with these 3PLs can actually be the single greatest thing you can do for your growing business, and it doesn’t even have to take as much from your expenses as compared to handling everything on your own.


Author’s Bio:
Angelo Castelda works as a contributor for a news magazine in Asia. He loves to learn and understand diverse cultures and aims to share through his writing his experiences around the world.

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