Five Ways a 3PL Helps Mitigate Supply Chain Risk – Phoenix Logistics

Shippers face a variety of risks across the supply chain that can be mitigated by outsourcing one or more logistics functions to a third-party logistics (3PL) provider. Partnering with a 3PL does much more than free up time to focus on core competencies—it offers a buffer between the shipper and the ever-shifting challenges of the logistics realm.

3PLs help shippers mitigate risks in a variety of areas, including:

Cost

While 3PLs get paid by shippers for the services they provide, the return on investment often exceeds the cost. Logistics providers give shippers access to a broad range of cost-saving benefits, such as preferential rates from carriers, premium distribution and fulfillment space, state-of-the-art logistics software, and much more.

Stability

If natural disasters, trade wars, and other unpredictable supply disruptions have you worried, a 3PL can help bring balance back into your supply chain. Your logistics partner can leverage their existing relationships with suppliers to ensure that you continue to get the parts, raw materials, and other goods that you need even when access to your primary suppliers becomes too expensive—or worse, unavailable.

Capacity

Trucking capacity has maxed out several times in recent years, causing carriers to turn down new customers because they simply don’t have the space. Your 3PL can help you find available capacity for your cargo across one or more modes because they already have existing relationships with a broad network of carriers. This ensures that your cargo gets where it needs to go—even when capacity gets tight.

Real Estate

Your organization may not have the resources to purchase real estate for storage or distribution, but 3PLs maintain a network of facilities that are ready to go. Even if your 3PL doesn’t have existing assets in your target area, they can expand their portfolio by acquiring it for use by you and other potential customers in that market. If you want your own facility but aren’t sure how to fit it into the budget, many 3PLs will help you find affordable space, such as lower-priced older properties in secondary markets.

Visibility

We live in the age of Industry 4.0, making it more critical than ever that you have end-to-end visibility of your inbound and outbound shipments. Maintaining a high level of visibility is perhaps the most critical method of avoiding supply chain risk—you can’t mitigate risk if you can’t identify and correct problems when they are happening. When you outsource transportation management, warehousing, fulfillment, and other services to a 3PL, you benefit from their technological capabilities that track shipments to your customers and deliveries from your suppliers, and identify problem areas before they become severe.

You’re Not Alone

Many businesses rely on 3PLs so they can focus on their own core competencies. For a logistics provider, the supply chain is their core competency. Successful risk management is proactive, not reactive—and it can rarely be done alone. A logistics partner brings a level of expertise to the table that won’t exist in businesses that don’t have a full supply chain management department in-house.

You need a team that you can trust to identify and avoid potential problems and risks that can impact your operation. Hands down, a 3PL is the most cost-effective way to gain the talent and resources you need for successful supply chain risk management.