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.
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.