How a Logistics Service Provider Can Help Your Business
Businesses that contract with a logistics service provider (LSP) save time and money by allowing the expert to handle unforeseen costs such as shipping rates, insurance and packing materials. This frees up capital for other financial needs like implementing new processes and hacking growth in new markets.
LSPs also provide bulk discounts on freight to help reduce business costs. To get the most out of logistics, companies should carefully assess what services they need from an LSP.
When you work with a logistics service provider, you can spend less time taping up boxes and more time growing your business. They’ll handle everything from warehousing to freight shipping to courier services. If your company has high order volumes, a logistics service provider can help you manage your inventory and warehouse to keep up with demand.
Many 3PLs also offer specialty storage for items like flammable, temperature-controlled or hazardous materials. They can also use specialized equipment for transportation, such as refrigerated trucks for food distribution. They can also offer multi-tenant warehousing, which allows them to store multiple clients’ products in the same warehouse, reducing overhead costs like rent and utilities.
Other companies specialize in cold fulfillment, which allows them to store and ship foods and other products that need to be kept at low temperatures. They can even provide a wide range of delivery options, including air and land transport. They may also offer drayage services that allow goods to be transported between ports and warehouses. Other logistics services include supplying, inspecting and testing equipment.
As a business grows, it needs to keep inventory on hand in order to fulfill sales orders. Proper storage requires careful tracking to ensure that the right amount of inventory is available at any given time – no more and no less. This involves balancing the cost of purchasing new inventory to meet current sales projections and ensuring that finished goods are not too old or damaged to sell. This is also a good opportunity to leverage the expertise of an experienced logistics partner who can provide timely advice and sourcing options for minimizing costs.
An LSP can also provide access to bulk discounts that would be difficult for a client company to qualify for on its own. This can help to reduce shipping rates, insurance and packing materials that chip away at profits. Additionally, an LSP Logistics service provider can optimize shipping methods and warehouse operations to lower operational costs for both themselves and their clients. This can free up capital for other financial needs, such as growth or managerial investments. The ability to outsource these responsibilities also saves on the cost of hiring employees to handle them.
Streamlining inbound logistics means getting goods and materials into the company’s production process efficiently. This requires assessing key inbound logistics processes, including inventory sourcing and procurement, supplier management, transportation, receiving and storage. Inefficient systems can result in high cost, waste, quality loss and duplicate work. They can also lead to information gaps, which can cause delays and other problems that affect a business’s operations.
Businesses with a high order volume or specific delivery requirements, such as temperature-controlled environments, can enlist an LSP to offer a reliable shipping service without the large startup investments required for creating their own fleet of vehicles. They can also rely on an LSP to provide warehouse capacity where they do business, which is more affordable than investing in their own facilities.
New start-ups like Flowspace, Waredock and Flexe are challenging the logistics services industry with their on-demand warehousing models. This allows companies freight international services to lease space based on their seasonal needs, which is cheaper than traditional contract warehousing. This flexibility can also help reduce shipping anxieties for customers, which can boost sales and create customer loyalty.
Depending on the business, outgoing logistics include packaging and shipping orders to customers or transporting goods to a distribution center. Streamlining outgoing logistics helps businesses reduce costs by eliminating inefficiencies such as wasted packing materials and unnecessary product return rates. Inefficient logistics operations can also result in higher transportation costs and additional warehousing expenses.
For ecommerce companies that need to scale quickly, outsourcing outgoing logistics can save time and money. A reputable logistics service provider has years of experience handling inventory, storage and shipping to help companies reach more customers more efficiently. They can help streamline workflows and provide customer support to handle any issues that may arise.
The services a logistics service provider handles can range from simple shipping solutions to complex operations that control the client’s supply chain. These third-party logistics (3PL) providers typically rent warehouse space and do not own their own fleet of trucks. Fourth-party logistics (4PL) providers take a more hands-on approach to logistics management, overseeing inbound and outbound transportation and warehousing. Fifth-party logistics (5PL) providers are more of a hybrid, offering the strategic management expertise of a 4PL but using carrier rates and freight marketplaces like Lojistic to optimize outbound logistics.
NetSuite ERP is a complete supply chain management system that includes order processing, fulfillment and inventory. It offers real-time visibility into business performance, financial automation and secure, global capabilities.
LSPs often operate more sophisticated shipping technology than client companies have in-house, allowing them to provide faster and cheaper delivery options. Using logistics key performance indicators, they can identify cost savings for both themselves and their clients by optimizing shipping methods and logistics services.
Integrated with field service management, NetSuite ERP delivers inventory replenishment and procurement capabilities, serialized and lot tracking, equipment maintenance, and more. The solution also enables service scheduling that improves customer appointment windows and optimizes route travel time. Productivity has soared 75 percent since Transport Management Solutions (TMS) upgraded from non-integrated MYOB and SugarCRM systems to NetSuite in October 2011. TMS is now able to expand its diversified transport brokering, warehousing and fulfillment operations to meet customer demand. This flexibility has helped it achieve 23 percent year-over-year revenue growth. TMS has also used NetSuite to streamline its order-to-cash process, improve accounting processes and reduce manual data entry.