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Home » Why work with a third-party logistics firm?

Why work with a third-party logistics firm?

The huge web of international freight shipping system is a daunting prospect for any business, whether established or new. If you’re not moving the same size product to the same location repeatedly various aspects will impact your domestic shipping cost. Consideration of distance, weight and delivery times is only the beginning of the list when deciding on the most suitable design for your shipping requirements, and a well-thought-out strategy can help you save cash and stress in the future. The process of calculating rates and formulating transportation routes is equally an art as the science behind it, and having a thorough knowledge of the business and a well-thought-out plan will ensure long-term results.

A third-party logistics firm (3PL) can simplify the process and improve your capacity to navigate transport channels across the nation. A 3PL is often a mediator in pricing and delivery times, 3PLs 3PL can negotiate special discounts and rates, and help companies achieve their goals and ideals, for example, getting goods to their destination on time and at the most affordable cost.

When choosing the right 3PL, or managing your own shipping department There are a lot of factors to take into consideration and a well-defined strategy is essential for everything else to work. The first step is to know the way that shipping companies look on your item. You can then decide on the most efficient method of delivering your product to the customer.

What is the factor that determines the cost of freight?


The first thing to think about is the concept of commodity. What is it you are selling? Are you selling something perishable? Are you able to tell if it is heavy? Fragile? It is important to know the value of your product and the way that shipping companies view the logistics involved in delivering your product.

The freight classification is allocated to the product(s) after they have been put together and are ready to be shipped. Shipping costs will be influenced by the freight class which is divided into 18 elements based on the weight, density, dimensions and the value of goods and their liability, the accessibility to handle, and capacity for storage. If your product can be placed on pallets, boxes, crates, or barrels, the shipping company must adjust their load according to the class of freight for the shipment. It is important to think to the method you intend to pack your product. A smaller and more manageable package for the shipping company will mean a lower price.

If the weight and size of your items remain the same, you can generally opt for a per-item or zone-based method, in which the cost of shipping varies according to the location of delivery, not by weight or size.

Time to deliver

Pitney Bowes, a global technology firm, announced in 2014 that an astonishing 93% of customers agree the importance of shipping choices as a key aspect of their online experience which is up from 24% in 2014.

In addition, 88% of the people surveyed thought that free shipping was an attractive incentive to purchase even if it required 7 to 7 days, as opposed to the cost of a delivery service that is 1-2 days.

A time-bound full truckload domestic delivery guarantee is a must for every business. Offering options to the customer like 1-2 days or 5-7 days, or free shipping must be thought of otherwise you risk customers looking elsewhere. So, you should have the capability to deliver the product to them via various ways. A 3PL can assist in determining the most efficient routes and methods to deliver the product.


The distance traveled affects the price, however the speed of transport and the modes of transport are the main reason. The packages are loaded at pickup locations, then transported or trained directly to their destination or transferred to central hubs, as well as Distribution Centers (DC). In the DC’s, truckloads are combined to increase the capacity of a truck. They are then routed through major channels. If the product is unloaded and loaded “dock-to-dock” with no requirement for lift gate service The cost is significantly less than if it needs to deliver to a residence or an inside delivery. If your product has delivery to a restricted access location, such as an educational institution, a church, or warehouse, additional costs will be incurred. Other Accessorial Charges like fuel price increases could increase the cost of shipping your product.

Shipping options

Does your product fit in a 1st class envelope? or on an 18-wheeler with a flat bed? It’s likely to fit somewhere between. An understanding of the benefits each type of transport can provide for you will aid you in deciding how you would like to move your cargo. Once you have a clear understanding of the product you are selling and how to pack it in a way that maximizes the value of its freight You can concentrate on the best way to get it to where it is required to be.

Documents and parcels

There are a variety of options for sending smaller packages. Anything from envelopes to packages up to 150lbs fall in this category. Establishing a reliable connection with a transporter can be a lengthy process, so it is beneficial to study prices and alternatives in advance.

Selecting an 3PL

When your company grows and your network grows it’s beneficial to have a knowledgeable team to handle your shipping requirements. The cost of shipping goods through the supply chain has been steadily increasing, and the complexity of transport management could be better off outsourced. Research shows that 3PL’s typically have better shipping rates and are able to speed up the delivery of your product. The experts estimate that companies could expect that freight costs to generally amount to up to 10 percent of their total costs which is a substantial amount to be aware of and employ the most efficient strategies to reduce costs. However, choosing the right 3PL isn’t as easy as choosing the most affordable or the largest. Selecting the right fit for your business is crucial. The success of your business should be determined by a long-term, profitable relationship.

When you are deciding on a Third Party logistics company (3PL) Here are some points to take into consideration:

What is the method by which your product will be delivered? Does the 3PL capable of handling all possible transportation options, rail, air and waterways, FTL/LTL, etc. Examining the way in which the 3PL handles similar products to yours could provide insights into how yours could be handled.
Value-added services. What exactly do you require to get your product moving? Re-palletizing, custom packaging white-glove storage, warehousing? While some of these services can increase costs however, a 3PL is often able to negotiate conditions and offer the most favorable prices.
Be aware of your company’s value system. Selecting a 3PL signifies that you’ll be working with each other to develop an efficient method of carrying the delivery process. The 3PL is, therefore, expected to be an extension of your business that should always reflect your objectives and principles. Does the 3PL demonstrate a high level of customer service? What is your company’s perception of urgency? Does the 3PL have the same feeling? Do you feel a sense group play, of people working together to achieve things? Do the dimensions of 3PL mirror your own? Is it too large that you think your business will not receive the attention to detail you want? What global resources can the 3PL provide? The core values of your company must be in place from the beginning. Establishing a long-term, sustainable relationship with 3PL 3PL is contingent on having a common vision of your current strategy as well as longer-term objectives.
What are the best ways to measure ROI? When you choose to contract out your transportation requirements How do you determine whether you’re getting most value for your money?
If you are trying out the 3PL system, make use of key performance indicators, such as:

– On-time performance

Damage or loss to the product

– Billing accuracy

– Costs (and hidden cost)

Communication is easy

– Problem solving through creativity

– Competitive discounts

– Elimination or reduction of accessorial fees

Best use of transportation and routing

– Consistent performance reports

In the current competitive environment shipping has assumed an importance that the majority of consumers see shipping as the top priority. The image of any company is shaped or destroyed through a handful of reviews based on the speed and quality of the service your business has promised. It is logical for every company, no matter how big or to establish an extremely reliable domestic shipping method to ensure that your goods arrive in time and at the most affordable cost possible.