Is Your Logistics Provider a Strategic Partner in Your Supply Chain Operations?

You make your business decisions on the best information you can.

But it’s easy to be held back by assumptions that don’t always hold up.

Busting the following two major myths and constituent assumptions will help you make the best decisions you can with regard to choosing a logistics company.

Logistics Providers Work Alone Door-to-Door
Many times companies presuppose that only the particular logistics company they hired will be caring for their goods. While a strong 3PL will keep the strictest of eye on your goods from FOB to cosign, there might be any number of other transportation and logistics companies involved in the process.

The involvement of other companies holds true whether the logistics provider is asset-based, nonasset-based, or a mix. Nonasset-based logistics companies will obviously involve a number of other linehaul, airline, rail, and integrated providers; however, asset-based companies are just as prone to interline their shipments.

The truth is no one company’s network is large enough to handle the volume of shipments required, especially during peak season. Logistics companies are also aiming to deliver maximized efficiency and interlining freight is an easy way to do that.

Understanding that myth shouldn’t make you wary, just conscious of a few implications.

3PL Vetting is Key
Though you shouldn’t assume that the logistics provider you work with will be the only company caring for your freight, you can usually assume that their credibility will stand for their partners as well.

Every 3PL understands that any problem in delivery reflects on them. For that reason, they thoroughly inspect the companies they work with.

Vet your logistics provider at the start to know exactly who you’re dealing with.

Look for 3PLs with Cloud-based Tracking Solutions
Highly specific, real-time freight monitoring solutions are revolutionizing logistics. With GPS integration, it is possible to track the position of a line haul or rail shipment down to the meter. Freight is even able to be monitored for shocks and extreme g-forces during transportation, allowing for finessed damage control.

Finding a logistics provider that delivers this information to you will give you peace of mind and ensure that the 3PL you contracted directly will always have an eye on your goods.

Through my work with Linkex and our partnership with OnAsset, I have witnessed firsthand how impressive an impact these solutions can having on transportation.

Position tracking has allowed us to stop multiple theft attempts and notify shippers that instrument calibration might have been affected during transportation.

It’s even given me the opportunity to monitor a couple late-night police chases through a data-rich online dashboard.

3PLs might utilize the networks of other companies to get your goods to their destination. But some can also keep a near first-person watch over your shipments.

3PLs Are Nothing More Than Middlemen
Logistics providers ensure that your goods make it from point A to point B. But the more oversight that your 3PL is given, the more efficiency they can introduce to your supply chain.

Logistics providers are useful because they have the experience and resources to optimize the efficiency of your supply chain. Anyone that has the power to stamp out costs or reduce your time-to-delivery should never just be considered a middleman.

In fact, the less you view your 3PL as a middleman and the more you come to view them as a supply chain partner, the greater the efficiency they will be able to deliver. A logistics provider that is trusted with managing a large portion or the entirety of a shipping supply chain can enhance overall efficiency dramatically.

There are a few ways that this might occur and being aware of them might help you make smarter logistics decisions.

Increased Oversight Increases Usable Data
A logistics provider can only gather data from the operations that under their purview. Data drives efficiency and the greater control a 3PL is given the more likely it is that they will be able to extract maximum efficiency from your operations.

Lane data can allow a 3PL to combine shipments or find transportation alternatives to reduce costs. Very small adjustments in shipping schedules can compound to deliver radical cost savings. But again, data from operational elements outside the 3PL’s control cannot be used to increase efficiency.

Increased Oversight Mitigates Risk
It seems counter intuitive that increasing your dependence on one logistics provider could help you mitigate supply chain risk. However, increasing a 3PL’s control affords the increased options in system design.

When a 3PL gains a 50,000 ft view of your origin to consignee picture, they can devise every possible integration of transportation. More options means more contingency plans.

In the event of a catastrophe affecting a large geography, wider control will also allow the logistics provider to execute a solution without external coordination beyond direct client interaction.

Reducing the number of parties that have to be contacted, informed, and inquired of during an emergency immediately decreases the time frame for a solution to be implemented.

Viewing your logistics provider as more of a supply chain partner and less of a freight middleman will quickly improve the cost and resiliency of your operations.

Jamie Wyatt is Chief Operating Officer at Linkex logistics (a non-asset based logistics and transportation management company).