Choosing the Right Third Party Logistics Provider

Logistics management has become a corporate focal point as companies look to trim costs without compromising safety and service. More C-Level professionals are realizing how successful supply chain management can significantly contribute to bottom line performance. Lean, efficient, reliable supply chains can translate into savings of up to 15-20%.

Receiving and delivering your freight intact and on time is vital to the sustainability of your business. Improving and maintaining service levels enables you to sustain your customer base and attract new business to increase market share. How do you compare to your competitors? Is your service top notch? Examining and refining your logistics management practices can make all the difference.

Effective supply chain management requires strategic and tactical approaches. It is often nearly impossible to handle all of this in-house effectively. 3PL providers handle the logistics management so your company can focus on quality products, service and smooth operation.

A good 3PL provider utilizes the latest technology to provide clients with exceptional analytics that can lead to greater operational insights. Using sophisticated software and supply chain expertise, your company can work with your 3PL to identify opportunities for operational improvements.

Successful logistics management is about details. Working with clients and carriers, moving freight and ensuring smooth operations requires strong leadership and flawless execution. The ideal 3PL excells at all of this and employs experienced and highly trained transportation planners. These planners partner with your transportation and customer service staffs and act as an extension of your business.

Effective logistics management can bring about competitive differentiators. Successful supply chain management leads to lower costs and improved service. Both rely on choosing a quality 3PL provider.

About the Author:

Kerry Schoemehl works for LMS Logistics, a non-asset-based third party logistics firm based out of St. Louis. LMS is one of the top 3PL firms in the industry, bringing freight management solutions and savings to such companies as BASF and Monsanto.

Schoemehl has exceptional knowledge and experience in the field of transportation logistics, and is happy to share her expertise with others in the industry. If you enjoyed this post, check out the LMS blog at http://blog.lmslogistics.com.

Hiring a 3rd Party Logistics Provider Vs Implementing Logistics Software

Product transportation is an inevitable part of the manufacturing business. Whether the goods are shipped locally, nationally or internationally, they have to reach retailers in order to produce business. However, as important as transportation is, companies often overlook the opportunity to reduce shipping costs. While the bulk of a manufacturer's bottom line is predicated on the quality and price of its products, reducing transportation costs can reduce a company's operating costs by thousands of dollars a year. Unfortunately, most companies lack the time and resources to determine optimal shipping procedures. That's why many companies now use transportation logistics software to help reduce shipping costs.

Also known as logistics management software, transportation software specializes in offering integrated shipping solutions that are tailored to a company's specific needs. For small companies that have simple shipping procedures, the software can be used to improve delivery time by studying such factors as road construction and highway traffic patterns. But for larger companies whose shipping process is complicated by multiple assembly locations and warehouse needs, the software can combine disparate elements of the shipping process into a single, integrated shipping solution that saves significant time and money.

In many cases, large manufacturers opt to hire a 3rd party logistics provider to implement logistics solutions on their behalf. While studies show that companies can cut shipping costs by ten percent after one year by either hiring a 3rd party logistics provider or implementing logistics software, hiring a logistics provider is more expensive than using this software. Just as logistics experts can act as transportation brokers, determining the timeliest way to get products to retailers and save companies money by eliminating MS software costs, 3PL costs, annual software maintenance costs, gain shares, freight margins and common rate base licensing costs, so can logistics software. The only difference is that logistics software is a more cost effective means of implementing logistics.

One example of how large companies can profit from logistics software involves choosing a more "expensive" means of transport over a less expensive means to reduce overall shipping cost. For example, while air shipping rates are typically more costly than ground rates, companies whose products make various warehouse stops can actually end up paying enough warehouse fees that shipping by air becomes the less expensive option. In addition, by cutting out the warehouse stops, a company's shipping process becomes timelier. An example of how logistics software can benefit small companies can be found in LTL shipping. Companies that commonly ship less than one full truckload of products often ship by mail carrier. However, when a partial load is shipped LTL, multiple partial load shippers share the shipping cost, which can be significantly less than shipping by mail. Whether or not to implement logistics software is not a debate about effectiveness, but about shipping management and cost savings. In terms of the latter, companies always benefit from implementing logistics software versus hiring a 3rd party logistics expert.

The easiest way for companies to streamline their shipping process and reduce shipping costs is to implement transportation logistics software. While some companies hire a 3rd party logistics expert to apply logistics solutions on their behalf, companies that use logistics software receive the same benefits while saving a significant amount of money.