R2 Logistics

6 Ways 3PLs Reduce Logistics Costs for Their Partners

If you want to maintain healthy profit margins, strengthen your cash flow, and protect your business continuity, you must capitalize on every logistics cost-saving opportunity you can. Of course, there are many ways in which you can go about reducing your logistics costs, but one of the most practical involves partnering with a third-party logistics (3PL) company.

The right 3PL will slash your logistics costs by leveraging a holistic strategy that helps you tap into cost-savings in the following ways:

Third-party logistics providers (3PLs) reduce logistics costs.

1. Pinpointing Labor Cost-Savings Opportunities

An exemplary 3PL will ensure your partnership gets off to a good start by conducting an extensive assessment of your supply chain. They will identify your greatest logistics costs and examine the efficacy of your current labor strategies. From there, they will specify any prominent sources of waste and make recommendations to reduce your labor expenses.

Leading 3PLs have extensive labor resources, so they can either scale your workforce or outsource certain processes to ensure you don’t have to continually hire and train in-house personnel.

2. Consolidating Cargo

Alone, you may not ship a high-enough volume of freight to secure great deals with carriers, but 3PLs manage a significant amount of cargo, meaning they can negotiate better rates and consolidate your cargo with their other clients’ shipments. The end result for you is a major reduction in logistics costs.

A 3PL provider will also take the hassle out of arranging shipments. They can tap into their vast network of carrier partners to get your freight where it needs to be while meeting tight shipping deadlines.

3. Using Cost-Efficient Shipping Techniques

When managing your cargo independently, you often have to take advantage of whatever shipping methods are readily available. In contrast, 3PLs look at the bigger picture and can therefore help you identify the shipping techniques that best align with your company’s needs.

For instance, a 3PL can help you determine when to pursue LTL shipping and when it is best to reserve an entire trailer for your cargo. They can also lower logistics costs by helping you explore other shipping options, such as rail-based or interoceanic options.

4. Optimizing Inventory Management

A 3PL provider is a master of the latest inventory management strategies, which means they can implement processes that improve your inventory visibility, help you avoid over-ordering, and prevent stock-outs.

Furthermore, the right 3PL partner will examine your current business model and inventory management strategy, then choose a customized approach that best aligns with the unique needs of your business and implements modern tools to support better inventory tracking. The end result is better product availability, streamlined shipping processes, and further-reduced logistics costs.

There are many ways in which you can go about reducing your logistics costs.

5. Measuring Carrier Performance

If you’ve ever wondered how your current carriers compare to the other options out there, you know firsthand that answering that question can actually be a difficult task, especially when you manage your own logistics processes.

A 3PL provider, however, uses robust performance monitoring strategies that are designed to ensure their carrier network is meeting your needs. They can connect you with the right carriers so you can get your shipments delivered on time, lower your logistics costs, and keep your clients happy.

6. Leveraging the Latest Tools and Tech

Partnering with a 3PL provider is an excellent way to work toward modernizing your technology stack. The best partners will provide you with dynamic, proprietary technologies, such as transportation management systems, so you can improve supply chain visibility and identify cost-saving opportunities.

If you want to remove friction from your supply chain, access the latest tech, and reduce your logistics costs, partnering with a 3PL is the ideal way to achieve your business goals.

Slash Your Logistics Costs with R2 Logistics

To learn more about how a 3PL can reduce your logistics costs and help you maximize revenue, we invite you to schedule a consultation with R2 Logistics, an end-to-end logistics services provider.