The Employer Store

Third Party Logistics Providers, Pros and Cons

Logistics st. louis

The vast array of business options a company faces on a daily basis can be overwhelming, especially when logistics is the topic. Just warehousing and distribution can take all of a person’s attention, but then you have to think about the marketing supply chain management. What does the product packaging look like? Brochures? So, in come Third Party Logistics providers, or 3PLs, the outsourcing solutions for logistics services, taking care of all the logistics issues. However, no choice ever comes without a downside, so in this we will take a look at both the good and the bad.

By 2018, eCommerce sales are projected to reach $500 billion, making logistics a huge profit consideration. If a company employs a 3PL, they do not need to purchase their own warehouses, a huge investment of capital as well as being an organizational hassle. Of concerns facing warehouses, space optimization was surveyed to be the most important by 91% of respondents. Important yes, buy hardly an issue a company facing product development concerns wants to dedicate resources to solve. With a 3PL, all aspects of eCommerce order fulfillment are handled, leaving a business capable of developing new products and services without splitting their focus. These advantages easily explain the remarkable annual growth of 3PLs from 12 to 15%.

With such advantages to marketing logistics and supply chain management, why would a company bother with an in house option? No matter how appealing it would be to outsource their decisions regarding marketing supply chain management, some company’s Powers That Be find the lack of control to be unacceptable. After all, if a 3PL messes up, its still the company’s name on the box. The logistics solutions a business selects must be reflective of the values that business claims to follow, leading the CEOs to choose an in house option to avoid mistakes.

The demands of eCommerce will not slow down in the foreseeable future. Businesses focused on logistics management services will be created more regularly to meet the needs of this market, expanding choices even further. Good or bad, it should at least be interesting.

Exit mobile version