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How to Reduce Logistics Costs

Logistics CostsLogistics (and the costs therein) is a necessary part of the productivity of your business. However, you should not simply accept your company’s logistics costs for what they are. You can greatly increase your bottom line by optimizing your company’s logistics costs. The best way that you can accomplish this goal without sacrificing the efficiency of your logistics operations is to source the benefits of a third party logistics provider (3PL).

What is a Third Party Logistic Provider?

A 3PL is an entity whose team of logistics experts use their knowledge and logistics industry network to reduce the supply chain and logistics costs of their client companies. Working with a 3PL company allows an organization to divert its focus to other business activities while optimizing the costs and efficiency of their logistics operations.

How Using the Services of a Third Party Logistics Provider Can Help You

A 3PL has experience and knowledge with everything related to logistics, so they can give you the tools necessary to streamline every aspect of your logistical operations. For example, the top 3PL organizations know how to do the following:

A 3PL will consolidate your shipments

When a 3PL finds out where you can consolidate shipments, this not only reduces your logistics costs by cutting back on the number of shipments, but it also increases the overall expediency of your shipments.

A 3PL will determine the most cost efficient shipping methods

Many companies make the mistake of sticking with a shipping method (vehicle, plane, train or water), simply because it is what they have become familiar with. However, they all have their pros and cons. For example, air is the fastest long range shipment method, but it is also the most likely to be delayed by poor travel conditions and it also usually bears the highest cost; a train, on the other hand, is usually the least expensive way to ship (and the fastest via ground), but it is not as fast as air; for both of these options, products must still be shipped via vehicle to the final destination. Vehicle and water shipping solutions face a similar number of pros and cons. A 3PL can determine the best solution for each shipping situation that you face so that you will reap the best possible cost and efficiency outcomes

A 3PL will automate your logistics wherever it is needed

One of the greatest wastes related to your logistics costs is the dedication of an exorbitant number of man hours to related tasks. When working with a 3PL, they will figure out where you can automate any logistics operations and help you implement the best solutions therein. This allows your company’s team to dedicate man hours to critical elements of your business outside of logistics that need more attention.

A 3PL can help you use more intelligent inventory decision making

You will find that a great deal of waste can come from improper inventory decisions. Simply put, excess shippments increases inventory (or poor storage methods) increase your storage costs; and too little inventory will increase shipping costs. A 3PL can help reduce your logistics costs by analyzing your business’s inventory needs and storage methods and upgrading how you handle your inventory.

A 3PL will already have the logistics equipment that you need to optimize your logistics costs

An important part of your logistics operations is having the equipment to get things done. However, owning this equipment will increase logistics costs. A 3PL already has this equipment, so you don’t have to pay for it.

To learn more about how to reduce your logistics costs, contact 3PL Links today!


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