8 Strategies to Make Your Third-Party Logistics (3PL) Stand out from the Competition

AUSTIN, Texas - Nov. 23, 2020 - PRLog -- As we prepare to cross into the third decade of the 21st century, we can look back and see clearly how Digital Transformation has steamrolled its way across one industry sector after another.

Newspapers and magazines (once supported by lucrative print advertising business model) have been overtaken by online media, including new formats, such as blogs, vlogs, and podcasts. The software industry has also been transformed, with app downloads and subscription-based Software as a Service (SaaS) business models largely displacing permanent one-time software license sales. And in the transportation market, the app-driven "sharing economy" business model has muscled its way in to overtake traditional taxi and livery car services.

As the tech revolution has transformed industry after industry, what's left on the table?

One of the last holdouts that has resisted Silicon Valley-style "rationalization" efforts has been the domestic freight industry and its highly fragmented carrier market, which is predominantly made up of independent truck drivers and small fleet operators (80% of which own less than 6 trucks).

As many entrepreneurs looking to crack this market have discovered, companies who ship goods to their customers are willing to pay good money to offload the burden of having to interface with this highly fragmented freight market.

Of course, the largest companies, such as Amazon or Walmart, have the financial wherewithal to invest millions to build up their own private shipping operations (including trucking operations, and in the case of Amazon, a private fleet of air cargo planes) to ship goods between their suppliers, distribution centers (DCs), major shipping carriers (such as FedEx, Ups, and the USPS), and their own fleet of delivery trucks.

But what are the options for smaller companies that lack the capital or inclination to start their own private transportation systems?

These companies are increasingly turning to a different class of outsourced freight operators, the so-called Third Party Logistics (3PL) companies.

3PL companies join the ranks of other successful business outsourcing models (such as outsourced payroll and benefits managers) that allow companies to focus on what they do best, leaving the messy details to a trusted third party.

The Covid-19 pandemic has only accelerated the uptake of 3PL operating agreements, particularly in the retail sector, as retailers facing plummeting brick-and-mortar sales have been looking for ways to ramp-up their online-commerce sales as fast as possible.

What Distinguishes Third-Party Logistics From Traditional Supply Chain Outsourcing Approaches, Such As Freight Brokers?

Read more...https://formaspace.com/articles/industrial/8-strategies-t...