Thinking of working with a logistics service partner for your business? There are advantages your business can reap by outsourcing logistics services to a third-party logistic provider (3PL).
Supply chain and logistics play a crucial part in business operations today. Outsourcing logistic to a 3PL not only helps businesses to leverage their expertise and network, but also ensure better customer experiences.
In India, most businesses outsource logistics services for efficient logistic management and cost-efficiencies. However, it’s not always easy to find a reliable logistic partner or leverage the perks of working with them.
In this article, we discuss the importance of logistics services for a business, and the benefits of outsourcing logistics services to a 3PL.
Advantages of logistics services to small businesses
Logistic management is challenging and often requires additional support in terms of resources, investments, need for technology adoption, and staying up to date on government regulations and business trends. Finding a logistics company to streamline and efficiently manage delivery of goods from its origin to destination can help businesses stay focused and productive.
Some of the more popular reasons for businesses working with logistics services companies include:
Leveraging cost advantages in goods transportation logistics
By onboarding 3PL service providers one can leverage the financial benefits it brings. Managing supply chain and logistics is expensive. It involves investments in vehicles, people, technology (e.g., IoT, GPS, barcode, RFID, drones, etc.), warehouses and more. Collectively, they add up to huge investments, which small businesses often find challenging, considering their regular struggle with day-to-day operating working capital.
A 3PL provider offering domestic logistics services come with their own fleet, technology, contacts/vendors, routes and infrastructure setup to manage end-to-end logistics services. Also, they work in volumes and with different businesses that enables them to have a strong network system and back-up arrangements to face bottlenecks and ensure safe and timely delivery.
Moreover, based on market and customer needs, businesses can scale logistics requirements with a 3PL without major investments, liabilities and risks involved.
This makes it worthwhile for small businesses to find and work with an end-to-end logistics services provider than invest in building inhouse logistics capabilities.
Grow business using advanced technologies
It’s no secret that digitisation is shaping how modern businesses operate, and to stay efficient and proactive in business, it is imperative to adopt and use new technologies and digital solutions.
For small businesses, while it is recommended to invest in an inventory management solution (e.g., Arka inventory, EasyEcom, TYASuite) to automate and manage inventory, stocking, and warehouse operations, it is often challenging to build IT capabilities exclusively for logistics management. That is why it is beneficial to seek the services of a logistics management company.
Logistics is no longer only about goods pickup and delivery. It’s an entire system. Any bottleneck, e.g., procurement or delivery of raw material, affects the entire chain. Technology has helped global logistics companies to automate several processes and stay competitive in a rapidly evolving digital era.
Technologies like blockchain, smart contracts, artificial intelligence, Internet of Things, digital twins, GPS sensors, etc. are providing businesses with real-time visibility into their logistics chains. It helps businesses to stay updated on weather conditions, road traffic status, ETA based on live package tracking, etc. to forecast and plan.
3PLs have the team and skills required to use technology and deliver. This makes it practical for SMEs to leverage 3PLs services than build IT capabilities for efficiency in logistics. It also enables them to invest time, effort, and finances in areas they can control and grow in (e.g., their core competencies) and leave logistic to the experts.
Add value to customers from the beginning to the end
Road transportation services in India comes with their own challenges. There are bad terrains, unpredictable weather conditions, shortage of manpower, road blockages to name a few. Together, they often affect logistics pickup and delivery and hence the overall customer journey.
This experience has scaled over the years with eCommerce business and online shopping transforming how consumers shop. Same-day or one-day delivery is the norm, with many consumers preferring to do business with brands that offer quick and safe delivery. Also, what matters is the packaging and condition the product is received in.
Businesses naturally must adopt a more customer centric approach, focusing on enhancing customer satisfaction. And logistics solutions play a crucial role in the overall plan.
3PL service providers have a wider network and deeper understanding of the entire cycle, including product packaging, storage, and pick-up and delivery. They also have policies and back-up solutions in place in case of unforeseen contingencies.
It also makes it cost effective, avoid losses and damages in stocking, and timely deliveries.
The role of logistic in business is multifaceted. And adding value to customer experiences is at the top of the list.
Letting experts manage and deliver
As a small business owner your core competencies lie in building products, marketing and delivering services. Logistic management is not your expertise, making it a complex, time-consuming, and often costly affair for you. Allowing a logistic specialist to manage your logistics therefore is a practical business decision.
That companies are experts in the field and come with the knowhow, network, and resources required to run the show. Years in the field have provided them with relevant insights, accurate data, and awareness to help you build a strong logistic strategy to run operations seamlessly.
They also have experience in handling cargo across air, water, and road transportation, in local, domestic, and international markets. This keeps them updated on the latest regulatory guidelines, custom duties and taxes, and documentations required to offer diverse logistic solutions while mitigating risks.
Availing professional logistic services comes with its perks. It allows you to offload all logistic solutions to them, with the knowledge that the products will reach its destination on time.
Importance of logistics management: The way ahead for SMEs
The advantages of logistics management for small businesses are more than one. On the one hand there are internal gains to business, on the other, there are external benefits e.g., insurance, customs, billing compliance, ITC claims etc.
The challenge however is to find a reliable and trustworthy logistic provider who can cater to global and local logistic needs. As a small business, consider the following when selecting a logistics partner:
- Seek recommendations from industry-associates to learn about the reliable logistics providers
- Visit a logistics marketplace to compare rates, services, freight charges, value-added services and other details of different 3PL service providers
- Check online reviews and ratings, and feedback from customers
- Shortlist 2-3 providers and discuss requirements in detail including risks, liabilities, payments and refunds, delivery timelines, terms and conditions etc.
- Consider having different logistics partners for domestic and international services
- Keep a backup logistics partner in times of contingencies or workload
Logistic is a key contributor to a business’s success. Without the right logistics services, businesses will hit a tight spot with little scope to accelerate growth.