3 Ways Top Tier 3PL’s Get Lower Carrier RatesWritten by Paul Forand
Does it seem like your shipping charges and yearly freight budget keep going up every year? It's not just you. Prices are going up on freight throughout the manufacturing industry, and you're going to need to get a handle on them to keep your profits stable.
For an increasing number of companies, that means partnering with a Third-Party Logistics (3PL) provider, who can negotiate better pricing than you can on your own.
A lot of traffic managers don't like to hear it, but today's biggest 3PLs offer advantages that a smaller company simply cannot find for themselves.
Three Ways 3PLs Can Get Better Deals
1 - History And Connections
Most businesses who handle their own freight management tend to switch companies often, seeking the best deals. While logical, this prevents them from building up a real history with any groups in the industry.
A 3PL will have years -or decades- working with specific carriers, and often working with specific employees of those carriers. That sort of close networking means they've got the connections to find better deals and, in turn, the carriers know these are companies they can trust.
2 - Leverage
Many large 3PLs take all their clients and bundle them together into mega-buys, so that many clients together can add up to the same sort of purchasing power that a company like Wal-Mart enjoys. This is pure economics-of-scale. The more that is shipped, the lower the prices go.
So by partnering with a 3PL, your shipment can be moved at nearly the same prices the huge multinationals can leverage.
3 - Software Optimizations
3PLs have networks of carriers they partner with, along with highly detailed databases on shipping times, routes, and rates. Beyond their other advantages, they can custom-match your loads to carriers that will get them where they need to be at the lowest possible cost.
Those same optimizations can also be carried into your own systems with the right 3PL. An increasing number of 3PLs are offering full software packages that can automate your own bureaucracy.
For example, it becomes possible for an agent at a POS to instantly look up shipping routes/rates in the 3PL database, to give exact shipping charges at the time of purchase. Once a purchase is entered, those same systems will automatically route the order around. Often, there's no need for any other human intervention!
In Today's Shipping World, A 3PL Makes Sense
The shipping industry today is highly competitive, with most carriers running at- or near-capacity virtually all of the time. That means they are the ones controlling prices and access. You need some muscle behind you to ensure you get better shipping rates than your competition.
The right 3PL can drastically cut your freight charges, while optimizing your systems for more-efficient ordering. That's a one-two punch which can knock out your inflated freight budget!
For more information, or a free consultation, just contact ReTrans Freight today.