A few weeks ago we discussed in an article about the different types of existing logistics providers. On this occasion we are going to focus on one of them, the 3PL operator, which is the type that Transgesa represents. We are going to see in more detail what are the functions of the 3PL operator, what advantages and value it brings to the customer and what companies that hire a logistics provider of this style should be aware of.
What is a 3PL operator
We are faced with a 3PL when a company chooses to outsource, totally or partially, its distribution, storage or order preparation needs. The external company that performs this work is the 3PL operator and within them we can also find various types.
Types of 3PLs
According to the distinction made by Susanne Hertz and Monica Alfredsson in their book “Strategic development of third party logistics providers” we can find four classes of 3PL operators.
This class would be the one that would be limited to the most basic aspects of the tasks of a 3PL. Its operations are limited to distribution, picking, storage, but without providing large elements of added value during these processes.
In this type we already find aspects that provide additional value. Among those cited in the work are traceability systems, the possibility of cross-docking, specific packaging services or specialized security elements. The 3PL operator can offer these services thanks to economies of scale and the use of information technologies.
The one that adapts to the client
This class is the one that, at the client’s request, completely takes over the logistics activities of the company. It tends to be more common in small companies, which, due to their needs and characteristics, find it optimal to give up a lot of control in their logistics tasks.
The client developer
Here the 3PL operator is fully integrated into the client. Contrary to the previous case, it is not associated with small companies, but with very detailed and intensive services that will mean that the logistics operator has few clients, due to the level of integration and volume of work.
Advantages of having a 3PL operator
Cost and time savings
Economies of scale mean that, in most cases, outsourcing logistics will be more efficient in terms of costs and time than setting up a logistics system similar to the one that a good supplier can offer us. In the same way, we will acquire the advantage of having professionals with years of experience, having them available from minute zero.
Low economic implication
Having a warehouse, putting it into operation, hiring staff, renting the machinery… Not to mention creating a fleet of vehicles, however small. All this comes at a very high initial investment cost that is often difficult to justify compared to the costs of an external provider.
When companies outsource 3PL logistics operators, they also take into account the peace of mind and mental rest that comes from being able to focus on the core of their business, instead of secondary aspects such as logistics.
The billing of the companies goes up and down, sometimes new markets open up or projects that did not turn out as expected are closed. Once again, all this is much easier to do with outsourced logistics that allows us to have less risk (due to having less money invested).
Not everything can be rosy. Outsourcing thanks to a 3PL operator also implies a series of challenges that must be taken care of.
Lost of control
The fact that we have outsourced logistics cannot make us forget about it. We must be aware of our delivery quality, timing, etc. In this distancing regarding their product, many companies find it difficult to be aware of the quality that their customers are receiving through their logistics operator.
One of the most critical points is to ensure that there are no problems between the IT systems of the provider and the 3PL operator. This point gains importance as companies get larger and more complex (which usually translates into greater information needs, more data volume, more people who need to be able to access information, etc.)
The recording of shipments, traceability or warehouse stock are some of the most common data that can cause headaches.