Shippers & Carriers Approach 3PLs For The Same ReasonsWritten by Neal Willis
A carrier will approach a 3PL for many of the same reasons a shipper will, and carriers often offer 3PLs better pricing than they would offer shippers because of the 1) Visibility, 2) Efficiencies, and 3) Control a 3PL can bring to the carrier, all of which lower the costs of handling the business for the carrier.
3PLs give carriers the ability to monitor how shippers operate at both the local and national levels more congruently. In a carrier’s book of business, a 3PL is usually viewed as a single client or shipper. Different shippers under the 3PL are viewed by the carrier as different lanes with different operating costs. By viewing the business this way, one lane (or shipper) with a terrible operating ratio can be easily identified by the carrier.
Carriers are also able to keep more eyes and ears on the business by taking advantage of a 3PLs sales and operational staff. The 3PL and carrier maintain constant communication to ensure the shipper is in good graces with each party. This ensures the shipper receives more attention with a 3PL than they would on their own accord.
In terms of efficiencies and cost savings, unless a shipper has an entire staff of people dedicated to carrier service and billing inquiries, a shipper isn’t going to be able to offer a carrier what a 3PL can offer. It’s not only efficiencies in billing and customer service; 3PLs can reduce a carrier’s overhead costs with their technology and contractual agreements, too
Customer Service – With the help of a 3PL handling the carrier’s business, carriers can spend less money on staffing to handle customer service requests. Instead, they can rely on the 3PLs staff to do that for them.
Accounting - Many shippers are unable to easily integrate electronically with carrier accounting and back-office systems, but the most reputable 3PLs are capable of sending and receiving both invoicing and document images via EDI (electronic data interchange), which cuts down on paper and labor costs for the carriers.
Contractual – Rather than trying to manage many shippers and many contracts, through the help of a 3PL, carriers can manage one contract with multiple shippers.
Technology – With TMS and shipment optimization software options, 3PLs can offer carriers the ability to easily integrate with multiple shipper platforms for everything from eCommerce to back office accounting systems with only minimal IT resources required from the carrier.
Perhaps the normal cutoff time for pickup by the carrier is 4:00 PM, but you have an order come in last minute on a Friday that could really earn you favor points if it were sent out that same day. Rather than wait until Monday to send the shipment out with your normal carrier, the services of a 3PL will allow you to call in for pickup from another carrier who is able to come in last minute at 5:00 PM. The added few dollars it might initially cost you may prove to be well worth it in the end, especially if it means keeping the customer happy.
Nowadays, many carriers also operate their own 3PL arm of business, which gives them the ability to change and adapt to shipper’s needs in real time. This allows them to be more responsive to changing consumer demand, which enhances overall customer service.
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