Top 5 benefits of Third Party Logistics
Third party logistics, or 3PL, is a service that is provided by a business to an organisation where some or all of the entire logistics system is outsourced. This outsourcing covers warehousing through to delivery, allowing the organisation to focus on other parts of the business.
3PL companies provide a range of services within the umbrella of logistics: this includes transportation, warehousing, picking and packing, inventory forecasting, order fulfilment, packaging and freight forwarding.
Want to know the benefits of a 3PL provider? See our Top 5 benefits below:
1. Cost reduction
As 3PL providers are able to work with carriers on behalf of multiple customers, 3PL providers are often able to leverage better rates than individual shippers by utilising their collective volume and order frequency. Utilising a company to manage some of your logistical issues also gives companies the flexibility to invest in other key areas of the business.
2. Provide a better experience to your customers
As discussed in Supply Chain Digital earlier this week, due to “The Amazon Effect” customers now expect next or same-day delivery as standard. Utilising a 3PL provider allows you to offer faster delivery to all your customers, as you are able to utilise the 3PL’s efficient and established distribution network.
Want to learn more about “The Amazon Effect” Click here to read more
3. Mitigate risk
Delays and unforeseen circumstances do happen in the world of supply chain, as we have seen recently with COVID-19’s devastating effect on global supply chains. When these issues arise, the 3PL provider is responsible for finding alternatives and solutions. As providers, they are also insured against the loss or damage of your products.
4. Gain instant expertise and knowledge in the field
Logistics can be a big and confusing step to take if you are just starting out, so it could be essential to gain insight from a company that is specialised in this area. Engaging with experts can improve and guide the way that your logistics operation operates, leaving you with the ability to focus on other areas of your business.
5. Get a handle on international logistics
Building on the previous point, one thing that 3PL’s can instantly offer is knowledge and expertise when it comes to international logistics. Are you planning to expand into a new territory? Do you have time to ensure that you have the correct duties, customs and documentation for all of your products? This is something that a 3PL can take care of for you. You have the flexibility to expand into new markets without the major risk of heavy investments in local warehousing space or staff.
There are many benefits of using a 3PL provider, these are just the top 5. Ultimately, these providers are experts in their field and allow you the flexibility of expansion and development in areas you had previously thought closed.
Uber Freight to Acquire Transplace in $2.2bn Deal
Uber Freight is to acquire logistics technology and solutions provider Transplace in a deal worth $2.25bn.
The company will pay up to $750m in common stock and the remainder in cash to TPG Capital, Transplace’s private equity owner, pending regulatory approval and closing conditions.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight, and former founder of the Uber-owned trucking start-up Otto.
Uber’s Big Play for Supply Chain
Transplace is one of the world's largest managed transportation and logistics networks, with 62,000 unique users on its platform and $11bn in freight under management. It offers truck brokerage and other capacity solutions, end-to-end visibility on cross border shipments, and a suite of digital solutions and consultancy services.
The purchase is the latest move by parent company Uber, which launched as a San Francisco cab-hailing app in 2011, to diversify its offering and create new revenue streams in all transport segments.
Transplace said the takeover comes amid a period of “accelerated transformation in logistics”, where globalisation, shipping and transport disruption, and widespread volatility are colliding.
Uber Freight plans to integrate the Transplace network into its own platform, which connects shippers and carriers in a dashboard that mirroring the intuitive experience found in its consumer vehicle booking and food ordering services.
“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” said Ron.
Frank McGuigan, CEO of Transplace, said the resulting merger will offer enhanced efficiency and transparency for shippers, and benefits of scale for carriers. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he added.
History of Uber Freight
Uber Freight was established in 2017 and separated into its own business unit the following year. In 2019 the company had expanded across the entire continental US, established a headquarters in Chicago. Later that year it launched its first international division in Europe, initially from a regional foothold in the Nertherlands, and later moving into Germany.
The logistics spinoff attracted a $500m investment from New York-based Greenbriar Equity Group in October 2020, and launched a new shipping platform for companies of all sizes in May, partly in response to a driver shortage in Canada.