When looking for better logistics solutions for your company, you may be tempted to go with the bigger, flashier 3PL suppliers, assuming that a firm’s size is directly proportional to its efficiency and technological skills. But, in reality, bigger isn’t necessarily better.
This article will offer you a clear understanding of the benefits of the third-party logistics provider environment, allowing you to make a more informed decision about your provider.
How to Determine the Size of 3PL Provider
If you’re thinking about contracting out your warehouse and/or distribution? Consider aspects such as a provider’s location, scalability, and scale when considering 3PL (third-party logistics) suppliers.
The size of a 3PL provider, on the other hand, is determined by factors such as warehouse space, warehouse control system, and the number of services it provides. Furthermore, whether you require a large or little service is determined by your circumstances. Here’s how to figure out which 3PL provider you’ll need.
If you need a lot of storage space, square feet of warehouse space is a handy way to figure out how big a 3PL company is. Because the expense of managing space on your own rises month after month, renting space at third-party facilities can save you a lot of time and money. Many agreements stipulate that you only pay for the space you use, and only when you use it. It’s a huge plus for firms that are seasonal or developing quickly.
How Mid-Size 3PL Provider Can Serve You Better Than A Big One
When it comes to third-party logistics companies, bigger isn’t always better. Larger 3PL providers, in reality, are frequently problematic. Of course, mid-size businesses have their oddities, but 3PL warehouse with net revenue of less than $450 million has something to offer. Because these businesses are tiny, they offer benefits that larger businesses do not.
The top management is invested in your business
This isn’t to argue that the big logistical firms aren’t, but it’s a different story. A mid-sized business, as previously stated, has an owner who can make choices without meetings, listen to customers, and love the work at hand.
There is a higher degree of involvement in the business, and believe it or not, the talent involved in the business is at a greater level at the touchpoints where a difference may be made.
On the front lines with its business and customers, top management, ownership, and talent are involved.
Requests and decision-making are more agile
Decisions can be made in minutes rather than days or weeks, as is often the case with big logistics firms.
With a mid-sized freight firm, your organization is a big fish in a medium-sized pond. As a consequence, your organization will be remembered every day and will not be lost in the crowd.
Mid-size 3PL providers usually serve a regional or multi-regional area, but they can also provide national or international services. Some companies provide a whole range of logistics services, such as warehousing, distribution including material handling systems and port services. Many mid-sized providers are financially stable and may have investment support.
Designing a tailored solution requires more creativity
Larger freight companies are fantastic options for shippers who fit their mold. But when requested to work outside of their volume, their systems malfunction and give consistently erratic service.
Unlike larger freight firms that depend on volume, mid-sized freight firms operate on a customer-by-customer basis. Allowing them to offer more innovative solutions that will benefit the shipper.
Freight management and larger systems are frequently less expensive
While this may appear to be more expensive on the surface. It is often not since the operating model does not necessitate “X” volume to be viable.
In terms of management layers, as well as general and administrative (G&A) and sales costs, mid-sized logistics organizations operate a leaner structure.
The model is likewise centered on the consumer, rather than on volume or task.
A better knowledge of how they add value
While both volume needs appear to be identical, they are not. Because the cost of acquiring new customers is considerable. The mid-sized freight firm is searching for long-term high-value connections. And will do everything it can to provide that type of long-term high-value proposition.
The focus of the mid-sized freight broker is deep, but narrow, on what they do best, and you’ll often hear them use the term “fit” because they know where they can outperform the larger logistics companies and when there’s a good business fit for them to be super successful long-term with a shipper.
Unlike large freight companies, mid-sized freight and logistics companies do not have a machine that demands the scale required for success. Instead, the mid-sized freight company feels compelled to increase volume by providing added value to its customers.
Within the well-positioned mid-sized freight and logistics company, more ingenuity may typically be found.
Mid-sized logistics firms have a resource pool that is frequently misunderstood by those in larger firms, but make no mistake: when you find the “perfect” provider, they will deliver value and solutions that even the largest brokers cannot match.
To Sum It All Up
You may readily understand the benefits of working with a mid-size 3PL firm without having to try out numerous companies.
By combining the same access and capacity as our largest competitors with the services and attention of a smaller company. Mid-size 3PL warehouse can deliver a fit that’s just right for you without having to tramp through a bear’s house just like our friend Goldilocks.