The Evolution of 3PL and How it Addresses Supply Chain Challenges

An increasing number of businesses are adopting third-party logistics to control their supply chain. Leading businesses are understanding that 3PL service providers can enhance their bottom line by letting them concentrate on their key competencies. As a first step toward learning what Third Party Logistics can do for your business, let us explore how Third-Party Logistics has evolved and then look at a few key problems a 3PL can resolve.

Evolution of Third Party Logistics 

Approximately 40 years ago, trucking, warehousing, global logistics, and IT were quite distinct industries. From the start to delivery, companies engaged in the shipping of products handled each separately.

No one knows for certain about the one who coined the term “third-party logistics,” however during the 1970s, companies started to rely on third parties for outsourcing inbound and outbound logistics services. Since the advent of eCommerce in the 1990s and afterwards, the word Third-party logistics has turned out to be widespread, and the number of services 3PLs provide has increased.

The 1980s- A Transformation in Transportation Environment

Some claim that the 3PL industry was born as a result of the Motor Carrier Act of 1980. As a result of this act, the trucking industry was completely deregulated, through an extensive lowering of prices, access restrictions, as well as collective vendor price setting. Due to this, the total trucking carriers escalated from below 20,000 in 1980 to approximately 1.2 million at present, leading to a highly fragmented market. It became feasible for 3PL service providers to provide value-added logistics services in a highly challenging logistics landscape. 

The 1990s: Globalisation and Offshoring

Global logistics management was in its infancy during this time period. Businesses of all sizes have diversified their product line into the international market that was rapidly growing. Economic developments in other countries, such as China and India, prompted businesses to move their complete manufacturing function abroad. Handling intricate, global supply chains have become increasingly important. Companies that offer 3PL adapted to start providing comprehensive logistics services locally and globally. 

The 2000s- Technology Boom

Technological advancements driven by the surge in internet usage, 3PLs have been able to provide solutions for linking diverse functions within the supply chain. 

Third-party logistics providers started to integrate inventory management, order management functions and transportation & logistics with solid technology platforms, in order to address the supply chain requirements of global businesses. A true supply chain visibility has actualised, and the efficiency rendered by present-day Third-party Logistics warehouses have kept growing to meet the demands of a constantly evolving global marketplace. 

Third-Party Logistics at Present 

The main Third-party logistics providers are able to make the most of international partnerships and infrastructure to offer a diverse range of flexible services. Offering supply chain solutions to businesses be it large or small is Third-party logistics’ core competency. Adopting Third Party Logistics can benefit your company by letting you concentrate on your core competencies, resulting in major expenses savings. 

How Third-Party Logistics Can Address Supply Chain Issues

Issue: Electronics suppliers having fluctuating sales volumes year around. 

Businesses having seasonal variable sales volume always incur losses by retaining additional vehicles as well as storage facilities, solely required for temporary spikes in demand. 

Solution– Flexibility with Third Party Logistics 

Adopting Third Party Logistics gives companies the flexibility of utilising the supply and distribution resources that are required on a case by case basis. A slow sales cycle means there is no need for needless investments that waste money.

Problem: Know-how Needed to Manage a Global Supply Chain 

The manpower, education and experience needed to be informed of the global compliance matters, economic and transportation rules, logistics issues turns out to be restrictive for an SMB. 

Solution- Outsourcing to Third Party Logistics Provider 

Third-Party Logistics providers are the best at global logistics support and have a wealth of experience managing the quickly evolving global documentation and customs norms and standards. 

Problem: Excessive technology Investment for Mediocre Businesses

Technology investment required to track goods from the start to the end destination, especially with global supply chains, can be extortionate for SMBs. 

Solution- Tier One Third Party Logistics Technology 

Established Third-party logistics providers invest heavily in transportation and warehouse management systems required to offer immediate insight into every facet of your supply chain.

Services Which 3PLs Provide

Inventory Management 

Inventory management entails something beyond merely warehousing your shipment. Third-Party logistics providers must let you effortlessly integrate inventory with your webstore, see current stock levels at every 3P fulfilment houses and prepare stock orders in advance before it runs out. After the Third Party Logistics provider gets and stocks your shipment, you can find out how much it contains, is available and daily sales for every product. This gives a complete insight into what goods you have to deliver at any particular time. 

Distributed Inventory 

By partnering with a third-party logistics provider having numerous warehouse locations, one can divide inventory among distribution centres to deliver every order from the Third-party logistics provider’s warehouse which is nearby your customer. This is known as Distributed inventory.

Using the right technology, with the help of robust algorithms, Third-party Logistics providers can automate the order fulfilment procedure that sends every order to the best fulfilment centre. 

You may want to ship your inventory to different fulfilment centres whether your customers are located all over the country. As a result, you can provide assured two-day ground shipping to customers in those nearby localities as your inventory is in close proximity to your shipping destinations.

Two-day Shipping 

Third-Party Logistics warehouse location can have a major impact on your capacity to meet customers expectations by stocking inventory nearby your shipping destination. Partnering with the right 3PL partner can go a long way to provide 2-day shipping at an economical rate to customers. 

3PL partners usually maintain relationships with shipping carriers that let them to secure discounted prices for their customers. But, the greatest expense savings for 2-day shipping result from dispersing your inventory among fulfilment centres in various areas. 

3PL Logistics Dubai by DDU Express

Whatever type of company you have that requires warehousing, DDU Express is here to help! We provide 3PL Logistics Dubai to fit your requirements. 

Why prefer DDU Express 3PL Logistics Dubai?

Scalable service: Over time, our large warehouses will be able to accommodate all of your expanding requirements. 

Our A to Z service: We deal with every aspect of the warehousing of your goods. 

Exceptionally reliable: Our reliable warehouses are outfitted with the latest technology to guarantee the safety of your shipment.

Proven quality: All around the years, we have earned the trust of many leading companies and institutions.

Get in touch with DDU Express for 3PL Logistics Dubai. 

About DDU Express

DDU Express is one of the premier e-commerce logistics companies based in Dubai, offering the best available Fast Shippin Services in Dubai. We provide our clients with extensive logistics expertise and network around the globe to make it effortless for them to move their shipments across borders. Our gamut of services includes Door to door delivery, Amazon FBA prep, 3PL Logistics Dubai, Commercial imports and exports, retail distribution, Cross Docking in Dubai and more.