The innovative technology that has helped people from different corners to connect, has also caused the world to shrink rapidly. To follow that trend and become a globally sound brand, businesses have started to pay attention on expanding their operations geographically and marketwise. But it is not always easy to manage all the operations equally when a higher goal is set to achieve. That is why businesses outsource certain parts of their operations that are obviously not core to the enterprise but still play an important part in their activities.
3rd Party Logistics (3PL) has become a common outsourced priority by businesses like groceries, pharmaceuticals, and special retailers – considering the fact that they give timeline precedent services with temperature controlled warehousing and transportation facility. Now, since transportation marks as the major reason why grocery prices are increased, it forces businesses to pay attention upon their distribution practices. The larger companies like Amazon, Walmart, and Costco have their own transportation, warehousing and delivery utilities which simply makes it easier for them to function. Meanwhile, the smaller companies are left to rely on local distributors, who do not generally transport to farther places.
Hence, to reduce the distribution costs the grocers have devised their own strategies, and one of them is partnering with 3PL and warehousing providers. There are multifold practical benefits to the grocery chains from these facilities which cannot be overlooked.
- Transportation is a hefty task which requires attention to minor details. It might seem a simple job but there are many levels to this phase that a grocery chain business owner might not be able to pay as much attention as needed. 3PL services bring the comfort of managing the relationships with vendors, customers and carriers while the business owner can focus on other aspects of the business to add to its growth. They bring a strategic management and professional handling of the stressful and difficult tasks, maintaining good customer and retailer relationships for the business owners.
- Private truck drivers have been retiring at a fast pace lately to find lucrative job opportunities. This has led to transportation complications for the small grocery chains who have now switched to 3PL services that employ in-house drivers and do not let any internal matters affect the transportation service provided to their partners.
- The flexibility provided by the 3PL companies during different seasons is something deemed very lucrative for the grocery chains. During the harvest seasons they offer additional transportation as the supply of products dramatically surges, while in a low supply season the business owner can choose to employ less transportation. Hence, the third party deliveries are flexible to supply and demand without wastage.
- Only a professional would be able to derive effective results in any job. The same formula applies to the 3PL services who are experienced professionals and know the intricacies of their jobs. With being effective managers they utilise the up to date and modern technology that the business owner might not want to invest in themselves. Along with that, they take care of other transportation mistakes, freight claims and more, which the business owner would not have to worry about.
- Grocery chains hail the services of 3rd party logistics for quick national lever operations. As they are unable to maintain the service on their own, they save the costs of transportation and provide competitive prices to their customers. In addition to that, there is one less portion where the business does not have to invest any capital in order to manage transportation or warehousing by partnering with 3PL services. It saves quite a lot of money which can be invested in growing the business.
It is visible that the grocery chain retailers have started to give in to the trend of 3PL partnerships. Although, looking from the business point of view, it is more of a carefully planned practical strategy than merely being a trend. As compared to the well-established global grocery chains, the smaller businesses simply aren’t ready to establish their own transportation system. Setting up of a new system with managing the labor will eventually break the back of a chain owner, since they already work on a very small profit margin. Even though the cost that a business owner may be paying for 3PL service might seem to add to the overall merchandise, the benefits and extra services provided to them outweigh all those doubts.
According to the grocers choices there are different 3PL companies with a wide variety of services. Overall, the chain owners are aware of the fact that minimising the costs in transportation and delivery by partnering with logistics services will aid the entire business operations. This will also affect the overall price a retailer charges from the end customers.
Author Bio:
Hello I am Melinda Nagy. I’m the content crafter and businessperson. I write to encourage and educate readers about the logistics and management to the business persons to enhance and expand the business. I write for the Inov8ive Logistics & Transport . Beside this I love food and cycling.