The word logistics means the detailed organization and implementation of a complex operation. Logistics can also be defined as the steps required to take a product from its point of origin to its final destination.
As a business owner, it may be a cost-effective solution for you to seek the expertise of a dedicated logistics firm to manage your supply chain problems, increasing the efficiency of your business. This company can leverage its experiences and connections to ensure that your finished goods or raw materials travel from your plant or subcontractor to the end user.
What is the Difference Between a Freight Broker and a 3PL Company?
It’s worth discussing these entities’ services to understand the differences between freight brokers and 3PL companies. A freight broker serves as the link between a supplier or manufacturer and the transportation companies that provide shipping services.
As a result, a freight broker plays an essential role in the entire supply chain, serving a wide range of industries.
A third-party logistics company (3PL) manages all logistics operations on your behalf. A 3PL company’s services include organizing transportation of your goods from the point of origin, warehousing, picking and packing for order fulfillment (if required), packaging, and freight forwarding.
Whether you’re a small business owner or the owner of a distribution center, using a 3PL service can improve the efficiency of your business.
How Does a 3PL Benefit Your Business?
Some of the critical ways in which 3PL companies and other logistics firms can benefit your company includes the following:
Help reduce costs
Because 3PL companies have extensive networks of carriers, they can secure superior rates for your goods than a small shipper operating independently. 3PL companies understand the benefits of working with multiple carriers and can use that to benefit the customer.
Economy of scale
Every business owner in North America knows that demand fluctuates regularly. An experienced and skilled 3PL company understands that supply and demand are not static and can help you adapt to market conditions.
A 3PL can help you expand into new markets without investing your limited resources. Since the company or its partner network will maintain existing warehousing space and staff in different locations, you can leave distribution logistics and inventory management to the 3PL.
Delays are a part of doing business that relies on transport. Increasingly, success depends on delivery times and organization. When you have a 3PL company acting on your behalf, they are responsible for investigating alternative solutions to reduce risk.
More experienced companies typically identify alternative logistics solutions in advance.
If your company is a startup enterprise, you need to focus on growth, and a 3PL can provide vital assistance in that respect. By outsourcing most of your logistics management to a 3PL, you and your team can focus on your core business, ensuring that all products are ready for market.
Logistics concerns, such as customs brokerage and clearance, can be time-consuming and expensive to navigate independently.
Bills of lading, air waybills, customs declarations, packing lists, and commercial invoices are all integral to shipping logistics. If you’re shipping goods internationally, the amount of paperwork required can be overwhelming.
Contracting with a company with the experience and knowledge to simplify the process alleviates stress and allows you to conduct your business confidently.
By providing efficient logistics, warehouse management, and other crucial supply chain services, a 3PL company ensures your products ship and arrive promptly. Whether you’re a Fulfilment by Amazon (FBA) seller or prefer to fulfill orders directly, your supply chain is time-sensitive.
Failure to ship goods or re-order stock on time can cause you to lose FBA eligibility, ultimately affecting your bottom line and competitiveness on the platform. We can help maintain customer satisfaction by shipping goods quickly, contributing to repeat business.
You can realize significant savings by contracting a 3PL company to handle your logistics, from warehousing to transportation management. A logistics company with the largest network can advise you on the best shipping methods for your goods and secure the best rates, keeping your operating costs to a minimum.
Why is Logistics Important to Your Company?
Whether your business is big or small, part of your plan should include sustainable long-term growth. This growth may be regional, national, international, or global. Having an experienced logistics company handling your shipping can stimulate this growth by increasing organizational efficiency and reducing operating costs.
Streamlining your logistics allows you to concentrate on your business’ production and supply chain. By leaving the complexities of warehousing, packaging, shipping, and delivering your goods to specialists, you can spend more time focusing on the growth of your business.
Different Types of Logistics Companies
There are different types of companies within the logistics industry providing different services. Some companies specialize in specific parts of the same industry, such as cold chain management and transportation. You can break down the logistics sector into these main areas:
Freight companies transport your goods from point A to point B. These companies may be small, carry only domestic freight, or offer international and global shipments. Companies may also specialize in particular transportation methods, such as sea or air freight, or provide multiple transport solutions.
Freight forwarders do not provide their freight transportation. Instead, they operate as a facilitator within the supply chain, working with their established networks to optimize transport solutions for you.
Besides coordinating the transportation of your goods, they also handle all the documentation related to import and export. These companies have a lot of experience and multiple carrier partners to work with, so they can save you both time and money in the short- and long-term.
Carriers provide vital transportation services for companies in practically every industry, including international shipping solutions. Carriers can include rail companies, trucking companies, air cargo companies, and ocean freight companies.
Third-party logistics companies
Commonly known as 3PL companies, these are businesses that specialize in providing all or part of the logistics for the supply chain of your business. How much of that chain they supply depends on the customer’s needs.
They may only supply your transportation and storage needs, or they may be a fully integrated part of your business model. In the latter example, a 3PL may supply warehousing, order picking, packaging, order management, and delivery services.
How Technology is Changing the Future of Logistics
Advances in technology are a constant within the logistics industry. Amazon’s plans to use drones for short-haul (15-mile) deliveries have been well-publicized, but what other developments are possible? Some new technologies are already here, while others are still in the research and development phase.
Artificial intelligence (AI) and machine learning are integral and necessary to progress, as the sheer volume of data increases daily. The real-time tracking of goods allows you to analyze data, identify difficulties, and optimize solutions.
Although futuristic-sounding, robots already play an important role in logistics, among many other industries. For example, automated storage and retrieval (AS/RS) systems and autonomous mobile robots (AMR) are critical to warehousing, increasing productivity and safety. As AI continues to improve, robotic systems are likely to expand into other fields.
Autonomous and semi-autonomous vehicles are currently used in many warehouses and commercial ports. In 2019, Reuters reported that the U.S. Postal Service tested self-driving trucks to deliver mail in some southwestern states.
This signals the potential of the technology to revolutionize the logistics industry as a whole, including how we haul freight.
We will not see a science-fiction future overnight. Many of these technologies have been in development for decades, and for some, there is a long way to go. But as an industry, there must be recognition of what technologies are needed and a readiness to embrace them.
Gain a Competitive Edge With Asiana USA
If your business needs goods moved between two locations, it’s worth investing in a company that can manage the logistics of your operation. This may range from solely organizing the transportation of your goods to integrated logistics involving your entire supply chain.
Regardless of the extent to which you outsource your supply chain management, you will likely save time and money.
At Asiana USA, we specialize in providing freight forwarding and logistics services to a wide range of industries in North America. If you’re a firm in North America seeking a China-based company as a partner or supplier, we have access to an international network of suppliers.
We also maintain offices in multiple locations, from Los Angeles and New York to China and Vietnam. If you need guidance regarding shipping or supply chain management, give us a call at (855) 500-1808.