Think 3PL’s Can’t Beat Your Carrier Rates? Think AgainWritten by Paul Forand
The situation with Third-Party Logistics companies (3PLs) and their relationship with freight carriers has changed drastically in the last few years. If you're still handling your own logistics and shipping, you're probably paying more for freight than you need to.
In fact, businesses are discovering that their freight costs are the number one controllable cost within their business. Most come to find, when they dig into the situation, that changes to their shipping procedures can boost efficiency and save money in every department.
The reasons for this boil down to two major areas: Leverage and Optimization. A good 3PL can help you with both, utilizing opportunities few companies would have when working on their own.
How 3PLs Leverage Superior Freight Pricing
It's no secret that shipping charges are rising quickly for most companies these days. As global manufacturing continues to increase, the demand for cargo space is driven up. Freight is no longer th
e "buyer's market" that it was in the 1990’s and 2000’s. Most freight carriers today are running at or near capacity, which means they are the ones dictating prices.
Only the largest of firms can still negotiate "sweetheart" deals with guaranteed pricing or reduced fuel surcharges. Top-five and top-ten shippers like Wal-Mart or Dell can still negotiate those deals... but not companies who aren't doing billions of dollars in business.
That's where 3PLs come in. Freight management firms who have been in business for years have direct ties to the freight carriers and bundle their clients into huge all-in-one buys. A strong 3PL has the same leverage as a Wal-Mart, which means they can negotiate prices that are generally 10-20% lower than a company can get on their own.
3PLs bring leverage that smaller businesses simply do not have.
3PLs Optimize Your Own Processes
The other element to consider is the costs on your side of things. Are your individual offices still negotiating their own rates? Are you still using slow, time-consuming paper-based processes to approve shipments and charges?
Could you even state with certainty a single dollar amount that represents all your combined monthly shipping costs?
A top-notch 3PL brings more than just industry contacts. They bring robust software-based solutions which can centralize ALL your shipping operations using the same techniques deployed by the freight companies themselves. Smart software automation allows for virtually instantaneous transmissions of orders, where it might have previously taken days for the order to move through the bureaucracy.
Today's 3PLs can evaluate your operations, and tie your departments together in a web of simple cloud-based software solutions which can quickly render your shipping paperless. Then, provide you with a single itemized bill that reflects all your freight charges in total. No muss, no fuss.
Think Again About 3PLs
Today's logistics providers aren't just middlemen - they're your opportunity to slash your shipping costs across the board. Contact ReTrans Freight today to learn more!