The global third-party logistics (3PL) market size accounted for USD 1.10 trillion in 2022 and is projected to hit USD 2.43 trillion by 2032. So what’s the driving force behind the 8.25% expected CAGR? We believe it’s the major benefit 3PLs offer to businesses.
As you know, navigating the intricacies of a modern supply chain can often be an overwhelming task, to say the least. Companies face many challenges—from managing inventory and transportation to meeting customer demands in a timely and cost-effective way. In such a complex landscape, 3PLs have emerged as invaluable partners for businesses looking to streamline their supply chains.
In this blog, we’re highlighting the top five benefits of working with a 3PL to simplify and optimize your supply chain operations. Let’s get into it!
1. Enhanced Visibility Over the Supply Chain from End-to-End
One of the primary advantages of partnering with a trusted 3PL is gaining enhanced visibility over your supply chain from end to end.
This visibility means you can track your products' journey from the manufacturer to your customers' hands, helping you pinpoint potential issues and opportunities for improvement. With real-time data and analytics, a 3PL can provide you with insights into key performance indicators (KPIs) and performance trends, allowing you to make data-driven decisions.
Enhanced visibility also enables you to proactively address any disruptions or delays in your supply chain, ensuring a more efficient and responsive operation. Plus, you’ll improve your cost efficiency as visibility translates into resource allocation efficiency.
In a world where customer expectations for transparency are higher than ever, having a clear view of your supply chain is crucial for building trust and ensuring customer satisfaction.
2. Improved Freight Audit and Pay Processes
The next benefit of partnering with a 3PL is the improvement in your freight audit and pay processes.
Managing and auditing freight bills can be a tedious and time-consuming task. It’s also prone to errors that can result in overcharges or disputes with carriers. Some 3PLs—like LynnCo—have the expertise dedicated to solving these issues. With our experts carefully reviewing and auditing your freight bills, you’ll have peace of mind that they are accurate and compliant with your contracts. This not only saves you money by catching billing errors, but also frees up your staff to focus on more strategic supply chain initiatives.
3PLs can also help streamline the payment process, reducing the administrative burden associated with managing multiple invoices. This efficiency results in quicker payments to carriers, which can lead to improved carrier relationships and potentially lower freight costs.
With a 3PL improving this process, you can then direct your attention and internal resources toward other core objectives—further driving growth and innovation for your business.
Overall, making the decision to outsource your freight audit and pay processes to a 3PL can be a tangible game-changer for your financial and operational efficiency.
3. Better Volume-Leveraged Procurement
When it comes to procurement, 3PLs can leverage their scale and expertise to secure more favorable rates and terms from carriers and suppliers.
By consolidating the purchasing power of multiple clients, they can negotiate better deals than most individual companies could achieve on their own. This volume-leveraged procurement strategy can lead to major cost savings and improved service levels.
Furthermore, 3PLs often have deep industry knowledge and relationships with various carriers, which allows them to match your specific needs with the most suitable transportation providers. This ensures that your goods are transported in the most efficient and reliable way possible.
In essence, 3PLs can help you tap into economies of scale and industry expertise that might be out of reach for your organization on its own.
4. Optimized Shipment Planning and Execution
It’s no industry secret that shipment planning and execution are at the core of a well-functioning supply chain.
3PLs excel in this area by using advanced technologies and optimization algorithms to streamline the process. They can provide a level of precision that is hard to achieve manually, considering factors like:
- Transit times
- Carrier performance
- Cost efficiency
By analyzing these variables, a 3PL can develop more efficient routing and scheduling plans, which can lead to faster deliveries and reduced transportation costs. 3PLs also have the agility to adapt to changing conditions, such as weather disruptions or unexpected demand spikes.
This adaptability ensures that your supply chain remains resilient and capable of meeting customer expectations, even in the face of unexpected challenges.
5. Better Technology to Maximize Efficiency
Technology plays a vital role in supply chain management, and 3PLs often invest in state-of-the-art systems to drive efficiency.
By engaging a 3PL, you gain access to cutting-edge transportation management systems (TMS), such as LynnCo’s SuiteEdge. With SuiteEdge, you'll get access to a world-class TMS to handle all your loads, shipments, and route optimization functionality. Behind the scenes, the LynnCo team has also developed and integrated over 30 additional software packages.
This advanced platform culminates data from an array of applications into one supply chain data store served up through LynnCo’s visual business analytics platform, allowing you to focus on driving change within and optimizing your business intelligently.
Additionally, LynnCo has the expertise to implement and integrate SuiteEdge seamlessly into your existing systems. This means you can benefit from…
- Near real-time visibility
- Advanced shipment notifications
- Supplier compliance and integrity checks
- Generated accrual reports at the push of a button
… without the headache of managing the IT infrastructure manually.
With the power of SuiteEdge through a trusted 3PL in LynnCo, you can adapt quickly to changing market conditions, improve customer service, and reduce costs simultaneously.
The enhanced visibility, improved freight audit and pay processes, volume-leveraged procurement, optimized shipment planning and execution, and access to cutting-edge technology like SuiteEdge all contribute to making your supply chain more efficient, cost-effective, and responsive.
If you’re looking to capture these benefits for your company, get in touch with us. We’d love to chat about how we can help you achieve your supply chain goals.