The changing role of 3PL warehousing
3PL Warehousing are no longer just for storage, but other operations as well
If you are not moving forward, then you are surely moving back. That is the reality of the world today. Business is changing faster and faster each day – and innovations are happening just as fast.
In our industry, third party logistics, we are also constantly on the cusp of change. On the most basic level, our clients need solutions that fit their supply chain. That means that we cannot be static, we must always be evaluating our services and seeing how they can fit the client.
One of these services is 3PL warehousing. As you know, warehousing is a core service of any 3PL, but that doesn’t mean it can’t change. The truth is 3PL warehousing is no longer just for storage.
Manufacturers now see 3PL warehousing as a way to increase efficiency and remove steps from the supply chain. By doing so, the entire process is more cost-efficient and “closer to the customer.”
How do they make this happen? It’s all about integration. Today manufacturers are more integrated with 3PL warehousing providers than ever! They take advantage of the other services that 3PL’s offer for flexibility and control.
Here’s a few of those services that manufacturers are using with 3PL warehousing:
Packaging: Seasonal demand means that manufacturers may want to delay the configuration of some products. We would estimate that roughly half of all manufacturers outsource their secondary packaging services – giving them more flexibility. By outsourcing this function, a manufacturer can reduce overhead – like labor and transportation costs.
Cross-docking: If you have not considered cross-docking, you should. It is the practice of unloading a product from one mode of transportation (truck or train), and loading onto another, with only a short warehousing stay. Manufacturers are seeing this as an option to reduce their need for long-term 3PL warehousing space, hence saving money. (Also see out blog on Transloading)
Flexible Space: There are high times in the year, and low times. During those low times you probably don’t need as much warehousing space. In most instances you pay for it, even if product is not sitting there. What to do? Don’t fret, your 3PL can sometimes pair your space with another manufacturer who has a demand opposite of you. This means, when you’re slow they take up more space, and vise versa. That also means they split the bill.
The third party logistics industry is always changing, and keeping up can be just as hard. Lucky for you, we have a newsletter to share tips and the latest industry news to keep you up to date. Sign up today, it is free and only takes a second.
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