Possible Pitfalls to Adopting Third Party Logistics and How to Keep Them at Bay

The 3PL industry is worth billions of dollars. A majority of the Fortune 1000 firms adopt some kind of Third Party Logistics Services. However, when it comes to your company, you might be wondering if it is the best time to get started. The choice of partnering with a 3PL provider is a big one. Owing to unanswered questions, there might be slight reluctance. Being cognizant of what to watch for and what to inquire to a prospective 3PL partner is vital. Listed below are five prevalent concerns and how you can use them to your advantage. 

Loss of Control

You have made great efforts to make your business thrive and build a name within your industry. You extend a premium product and appreciate your customers. You may have grown out of your existing storage and distribution strategy; but, handing the control over to another party may give a pause to you. 

3PL Partners are adept at transporting goods. They have the expertise, equipment, and networks to accomplish the task. By outsourcing logistics, you’re able to concentrate on your core business. 

When seeking the right Third Party Logistics partner, you can take steps to reduce worries when it comes to lack of control. You need to assure that your Third-Party logistics partner allows you to monitor fulfilment information in real-time, round-the-clock. In this manner, you can stay on top of the movement of your goods along the supply chain. Moreover, assure that the 3PL providers are equipped with the required necessary customer service skills and dedication to offer the support your customers expect. This is crucial to upholding the degree of customer satisfaction quite vital to your business.

The Absence of Personalized Service

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There is a product that is unique to every company. You may need anything from pick-pack to needing specialized handling. Assembly or kits may be required for some products. Maybe reverse logistics is needed. Demand for your offering might vary by season. 

Make certain that your Third Party Logistics Provider is adaptable, transparent, trustworthy, and open to your concerns. It is essential that solutions are bespoke and scalable. 3PLs need to be forward-thinking and can plan for the expansion of your company. If the 3PLs have many years of experience in the field and handled a wide range of clients, then it is likely that for your company too, the Third Party Logistics provider can develop and implement a customized plan successfully. 

The Problem of Integrating Communication Systems

The logistics industry is constantly evolving. Technology in communications is quickly changing to keep up with the times. For you, It may seem challenging to stay current. However, a Third-party logistics partner can assist you in a variety of ways. You will want to be assured that a transition team is there for you to execute an action plan. Your Third-party logistics partner must quickly and impeccably integrate with your information systems. A free exchange of data is essential. This is particularly significant, whether they will be assisting with customer support, marketing, billing, and financing. Precise inventory control documentation can go a long way to prevent incomplete shipments, cancellation, delays, and backorders. Inquire the Third-party logistics partner regarding their degree of technical assistance and troubleshooting capabilities. Are they equipped with an eCommerce platform and can they handle multi-channel selling? In addition, they should be committed to continuous process improvement.

An Inadequate Handling of Reverse Logistics 

You know that handling returns in a trustworthy fashion are not merely a nice-to-have feature; inventory control relies heavily on it. If not handled in a proper way, returns may impede your process and reduce the inflow of cash.

Whether owing to a recall of the item, or from one customer or several retailers, returns transporting to a single centralized point of return makes certain efficiency and consistency. The objectives of your Third-party Logistics must be to repurpose and reclaim, eliminate wastage and adhere to every regulation. Returns are a given, during these times of frantic online ordering.

The Expense of Startup Charges

It’s obvious that working with a Third-party logistics partner will need a few initial costs. Few typical costs comprise of on-boarding, reception of stock, and warehousing. Looking beyond the short term is important. You can conserve money by eliminating inefficient processes. The benefit is not merely cost efficiencies but more prompt delivery. 

You can be certain that a good Third Party Logistics provider has the greatest inventory management and automation. They are equipped with state-of-the-art security systems at their facilities. By your side, there will be fewer expenses when it comes to equipment and system upgrades. Maintaining your own warehouse may not be necessary at all. Costs minimize and there is an increase in delivery times by picking a partner who is based centrally, preferably with multiple locations. 

A Lack of Documentation of Vital Processes

Jot down a method that you will follow for dealing with returns or refunds that you expect your Third-party Logistics provider to stick to if any. Whether there is a need to cater to your VIP customers, no matter the cost, then inform your third-party logistics provider.

Although when compared to you the Third-party logistics provider is probably going to have distinct processes, never be hesitant to delve into the specifics in the crucial areas. A focus on these details will keep clients from becoming aware of the transition and will aid with retention via the change. 

Not Being Transparent

Another common 3PL Pitfall is handling future forecasts and estimates like a trade secret. Although you might be reluctant to disclose your data with outside parties, your 3PL Partner needs to act as an adjunct of your own team. 

You should consider the future of your business when picking a 3PL provider to assure that they can thrive alongside your objectives. Ensure that your prospective 3PL Partner is cognisant, whether there is a new product wanting shipping certifications or plans to grow your business threefold. Whether your sales are dropping or your company is experiencing difficulties, then transparency matters just as much. Your 3PL provider can go a long way to avoid expensive overnight shipping or adjust your 3PL plan to minimize costs.

Using Outsourcing Merely as a Cost-saving Measure 

Your company is likely to save money via outsourcing. However, if that’s your sole reason for partnering with a 3PL provider, you’ll need to change your mentality to steer clear of one of the most prevalent 3PL pitfalls.

Whether you’ve previously dealt with shipping, customer service, the fulfillment you know how challenging it can be to often deal with crises. You will have more time internally to focus on what matters, such as improving your product if you outsource.

A thorough analysis of the advantages and disadvantages of outsourcing your logistics is imperative before making the right decision. Factor in how you can change these 5 possible cons into pros will let you pick the most informed solution for your business. 

About DDU Express

DDU Express is one of the top organized third-party supply chains and Logistics  Company in Dubai. We extend 3PL, Last-mile deliveries, IOR/EOR, Warehousing, Last-mile deliveries to a wide range of customers. We render solutions that let our clients make the most of our distribution network and improve the performance, their supply chains’ cost efficiency, bringing products to market faster. For over 25 years, DDU Express has served as a resource for firms, turning their shipping more effective, efficient, and facilitating management.