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Advantages of Working With a 3PL Firm

Updated: May 12

Advantages of Working With a 3PL Firm

Why Choose a 3PL Firm in Today’s Shipping Climate?

You can hire a 3rd party logistics (3PL) firm to manage all of your shipping logistics, from scheduling to warehouse containment, from the nitty gritty details of distribution to optimizing space and maximizing your profits. When working with the highest quality of 3PLs, you get service at every step of the supply chain, which saves you money and headache.

For example, by maintaining communication streamlined from each component from shipper to final destination, you can focus on your business and product while your 3PL takes care of the rest. Your business has enough to focus on internally- product development, market research, consumer analysis, etc.- that you don’t have the time to learn an entire other industry and juggle the immense number of relationships required to coordinate your shipping from origin to destination.

Rather than spending all of your time navigating ever-changing shipping policies and fluxuations, international regulation changes, brokering space in shared shipments, and putting out fires as hiccups occur en route (due to weather, international politics, shipper acquisitions, equipment malfunction, etc.), let us be your 3PL shipping experts and take all of those decisions, negotiations, and relationships off your plate. “Unfortunately, the acts of political instability, natural disasters, human resources shortages, and regulatory challenges that we’ve seen in the past two years aren’t an exception to the rule. Supply chain disruptions are happening with increasing severity and frequency, with experts reporting significant disruptions now occur every 3.7 years” (Source).

Especially in the post-2020 shut-down world, there is more to navigate in the shipping industry than ever before. According to Armstrong and Associates,a leader in 3PL market research and consulting,

“Frequent conversations, collaboration, and flexibility have been key to mutual success during continued disruptions such as manufacturing shutdowns, container shortages, port congestion, and increasing labor challenges.” Their 3PL Value Creation North America Summit 2021 reports, “Container shortages, which are tied to dray chassis shortages, have caused major supply chain disruption. Port congestion remains a huge problem and will continue deep into 2022. Pivoting to other transportation modes has helped in securing carrier capacity. Passenger flights have been converted into air freight for a few months.

Shutdowns in Asia forced more domestic activity. Nearshoring and cross border business is up. Shippers are adding new vendors in Mexico to obtain shorter product lead times. The Chinese New Year is coming earlier than usual and the Olympics are in Beijing. Delays may remain inevitable into mid 2022 for those relying on components from the Asia Pacific region.

Vietnam has been a great spot for air capacity. China and Hong Kong remain core lanes. Thailand and Malaysia are secondary but do not have direct flights or large capacities of ocean sailings. Taiwan is an area to watch, especially from a technological product standpoint.”

This all affects your company’s abilities to ship, but unless you plan to navigate all of those changes and continually adapting demands on your own, you need a 3PL. Now more than ever, relationships with warehouses, which are so highly in demand and have run out of space, are necessary. Warehouses are dropping small contracts for larger ones. Without a 3PL who can make multiclient deals and optimize space usage for all parties, changes of small businesses or smaller shipments getting space is shrinking daily. Even 90% of Fortune 500 companies use 3PLs, and that was before the pandemic and today’s even higher demand for warehousing and supply chain’s bottlenecks. So, without a doubt, we can save you money AND get your shipping streamlined so your products faster and with far fewer hiccups than before.

Another new trend in shipping that businesses are having to respond to is addressing consumer concern for their company’s sustainability. “Sustainability used to be a footnote on shipper RFIs; it is now a significant portion of the request. Automating parts of the freight brokerage process with technology, increasing carrier reutilization and better planning routes” by using 3PLs’ optimization of shipping can increase a company’s brand image with consumers (Armstrong and Associates).

Overall, if your business is looking to reduce your overhead costs, have partners who specialize in shipping and can invest in technology and automation advances, no longer be limited by warehouse space, free up time to focus on growth, insulate your supply chain process against global disruptions, increase the distribution of your inventory, maintain relationships up and down the supply chain for you, and scale your product up and down when you have sales and fluctuating product demands, then hiring a 3PL is right for you!

Why 3PL over 1PL/2PL/4PL?

1PL, 2PL, 3PL & 4PL Diagram

Contracting with a 3PL is ideal because it takes most of the burdens of shipping off of your hands but still gives you access and control within the supply chain decisions. 2PL, on the other hand, regresses you back to having to own a lot of the supply chain management yourself, but in terms of work hours and in terms of owning the actual equipment and warehousing space.

Essentially, as you move up the chain, you release more and more control and decisions to the logistics company. This can have some positives and negatives. That’s why we believe (and as trends will show you with the booming 3PL industry, thousands of others do too), that 3PL is the perfect balance. While it can seem that having everything a 3PL can offer you and “more” would just increase the benefits already outlined by a 3PL, there are diminishing returns. Beyond a 3PL, the more you hand off for logistics decisions to a 4PL, the less adaptability you have. For example, many 4PL companies outsource to 3PLs along the way, so instead of getting to work with the group actually moving your products, you have to go through the 4PL as a middleman. Yes, this can lower costs as 4PL negotiate bigger group contracts with 3PL, but it removes you from the relationship with the 3PL and cuts your direct line of contact.

Examples of 4PLs are the Shopify Fulfillment Network, Deliverr, and ShipHero. While there can be benefits such as quick turnaround for scalability and growth, access to more options for warehouses, and expanded distribution, complaints often include lower quality control, lack of customer support, and inconsistency since every warehouse in the 4PL network operates independently.

Why Choose TForce Worldwide as your 3PL Specifically?

TFWW GR is a family-owned, full-service logistics business established in June 2008 and headquartered in Grand Rapids, Michigan. In December of 2012, the company entered into a direct business partnership with TFWW (formerly DLS Worldwide, a division of RR Donnelley a Fortune 500 Company.) The relationship formed with TFWW has allowed us to procure competitive pricing and elevate our service levels with the use of their technology. Our partnership is as strong as it has ever been and is a large part of our success.

What differentiates us from other logistics companies? We believe it is made up of three fundamental business attributes:

  • Integrity - We do what is best for the customer in all aspects, as if each shipment, each BOL, claim, and/or dispute was our very own company shipments being managed, and overseen from start to finish. Lead by integrity example mantra daily is our purpose as preferred freight logistics TOP 100 provider. We are recognized annually in our vast industry, and multiple business sectors.

  • Professional Respect - Every customer, be it large-, or small, is treated with the utmost respect. TFWW Grand Rapids prides ourselves in earning our customers respect-, and gains this mutual business discipline as a Best Practice/ Core Mission Value: Respect Given, and Earned in Return ...

  • Quality - The customer service we provide to our customers and vendors is second to none. TFWW Grand Rapids daily alignment of Standards of Excellence throughout supply chain process end-to-end. Top notch quality benchmarks are in place with our SOP's, which we stand by, to deliver cost- effective results.

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