How 3PL Warehousing Differs from General Storage Warehouses

Third party logistics (3PL) are companies that handle the packaging, storage and transport of goods on behalf of another company. The annual investment in 3PL warehousing keeps growing every year since more businesses are seeing the advantages of this kind of warehousing.

packaging 3pl warehousing

There are major differences between these advanced 3PL warehousing services and general storage warehouses; and these should inform your decision on whether or not such companies will be necessary for your specific business needs.

Packaging & Transport of Products

First of all, 3PL warehousing involves more than just storage of goods. These companies get involved in the packaging of your products and also transportation. Depending on the specific company you choose, all these will be done in a timely manner. A good tip here is not just to consider the pricing of a company’s service as some are priced cheaply for very good reasons.

Basically, with a 3PL warehousing service like that of United Facilities, you are saved the headaches involved after making a sale and can simply focus your energy on what you do best as a businessman: making sales.

Individualized Warehouse Storage Space

3PL warehousing also saves you the pain of losing money during low sales periods. When inventory drops, such warehousing companies will allow you to pay only for the amount of space you need every month. In essence, if you need less space the next month, your payment rates can be adjusted accordingly.

This is typically not the case with general storage warehouses. General storage warehouses typically require a business to invest for a longer term lease and whether you need the space the following month or not, you still have to pay for it.

Labor Support

A company that is growing may experience difficulties in employing staff to oversee the storage requirements of their products. Moreover, small business owners may not even be sure how long a good sales period will last and having people permanently employed could be a big risk.

If you intend to go the route of using a general storage warehouse space, you should be ready to deal with these issues. A 3PL warehousing company saves you this headache as they take the risk upon themselves. What happens in this case is that you trade time for money and in the long run, you actually end up saving more money.

3pl warehousing

Food-Grade & Cold Storage Warehousing

Additionally, 3PL warehousing and fulfillment companies could also offer temperature controlled storage services for those looking to transport perishable foods and drinks. The quality and popularity of food grade storage has been rising over time. If you intend to package, store and transport food products, it is necessary to enquire whether a specific company offers such services.

Since third party logistics companies usually have access to better machinery than a regular business, the quality and expertise involved is usually exceptional. Most of these companies also offer custom packaging services which could be more expensive to obtain if you opt for general storage warehouse space.

Customized packaging can be an important tool in boosting business sales and attracting new customers and top 3PL companies understand this fact well enough. Typically, they will also offer advice on how you should handle your customized packaging.

4PL vs. 3PL: What’s The Best Logistics Solution for Your Company

Fourth-party logistics, or “4PL,” is the arrangement where a firm contracts or outsources its most of its supply chain solutions to more than one companies (who are often the third-parties of the logistics and supply chain). In short, a 4PL company or contractor is more of a coordinator the activities of the 3PL.3PL 4PL Companies

A 4PL provider ultimately accumulates resources, technologies, and capabilities to run the entire supply chain of a company. Ideally, the outsourcing of transport services through a 3PL has been an effective way of utilizing expertise, improving processes as well as reducing costs of transportation by a company. 4PLs are gaining more and more popularity in the logistic sector. They are the multi-service providers handling all the logistic operations right from planning to final reporting.

How 4PL Differs From 3PL Services

A 3PL company does or specializes in the field job i.e. activities such as warehousing, freight forwarding, inward and outward material, contracting transporters, packaging, and safety of cargo among other tasks. 3PL companies typically customizes all these services to suit customer needs.

A good example is the reputable 3PL company United Facilities, Inc. This 3PL provider is so versatile with its logistics and supply chain solutions that many business can rely on them without needed to work with a 4PL to help simplify things.

Lately, most 3PL companies have specialized in some areas of the industry. The advantage with them is that they have various footprints in most parts of the country, and this enables them to serve most clients located in remote areas.

4PL, on the other hand, deals majorly with the management of supply chain, analysis, planning, design, and optimization among other key sectors. 4PLs majorly concentrates on the corporate job and does less of the field tasks. in a nutshell, 3PL mostly execute the real-time tasks while the 4PL primarily executes more of future planning by use of past information. 4PL are effective in improving the supply chain and inbound logistics of a company.

Advantages of Working With 4PL Companies

1. Information visibility offered by 4PL companies allows a company to drive savings and improve service delivery. They are capable of highlighting areas of inefficiency in a shipper’s line of operation. This makes them more efficient, unlike 3PL’s that lack the incentive to drive out wastages and reduce costs.

2. Optimization of material flow. 4PLs enable a smooth transport management system and freight consolidation and other backhaul services and opportunities.

3. Improved productivity. 4PL providers can handle all the logistics on behalf of a company. This allows for easy detection of flaws in the supply chain hence improving the overall productivity of a company.

4. Quality personnel continuity. This is what sets 4PLs apart in the logistics industry. A company can access well-trained staff for quality operations.

5. Ensures neutrality. By fully acting on behalf of a client, a 4PL is capable of providing high-quality services in implementing the transport services of a company. Additionally, they provide essential information needed in meeting the shifting market dynamics.

With the current transition of 3PL to 4PL for some companies, certain business models and manufacturers have found the more conducive logistic services over 3PL. Taking the instance of the automotive industry, electronic and other warehousing companies, 4PL’s have been able to help them pick the best areas of specialization.

This has helped most clients excel in winning customers’ loyalty. Similarly, medical and other health care providers have found their way in seeking an intricate service delivery in clinics and hospitals. They are now able to drill down dip in their line of specialization.

3 Advancements in How 3PL Companies Conduct Business

Over the past few decades, the overall business model behind top-level 3PL companies has significantly evolved. Not only do third-party logistics (3PL) providers handle the warehouse storage and logistics distribution needs of the clients, but they also provide host of advanced solutions to help streamline operations for their customers. Below are just three examples in how 3PL companies have advanced their capabilities to provide more advanced logistics and supply chain services.

3PL Companies Distribution Center

Integrated Advanced IT Infrastructures

With massive expenses that comes with integrating a robust IT (information technology) infrastructures and support platforms, retail companies seeking to leverage the capabilities of a warehouse management system (WMS) for enterprise resource planning (ERP) can turn to the solutions provided by top-level 3PL companies in the industry.

The ability for 3PL providers connect to customers existing IT systems for the integration of their distribution activities allows clients to minimize the burden of having to establish such systems in house. As a result, 3PL providers who provide such solutions are able to help increase the overall efficiency and cost effectiveness of their clients logistics operations.

Managing Labor & Strategic Workforces

Although in the past 3PLs have not been known to manage and aid the labor force for client’s warehousing and distribution operations, this component supply chain management has become integral for most full-service 3PL companies.

As a result, today’s top 3PL companies in the U.S. are able to provide expert labor and workforce optimization and strategic output solutions for clients. This has particularly become important ever since the U.S.’s post-recession labor shortage that a number of different companies have experienced across multiple industries. Additionally, 3PL companies handle complex frieght requirements and other confusing aspects of distribution that would otherwise be a challenge for most businesses.

With better management and strategic workforces, companies are now able to concentrate on developing and utilizing their staff in the ways that matter most to growing their business. This new industry-standard of applying labor planning solutions among 3PLs has enabled companies cut costs in overall warehouse management and basic supply chain functions.

Last-Minute Kitting and Packaging Solutions

While most 3PL companies provide comprehensive warehousing and distribution services, the added value that only select logistics companies offer includes final-stage, or last-minute kitting and packaging solutions.

This enables warehouse and distribution centers to delay or accelerate specific functions, as well as decision making and predicting variables that are associated with specific order volumes and product needs for end customers. As a result, companies can either distribute their products and shipments in bulk, or have them packaged by the 3PL company according to their needs for their retailers.

Universities Offer More Supply Chain Management MBA Programs to Meet Industry Demands

The increased need for supply chain managers has been on a steady increase over the past few years. In almost every supply chain and third-party logistics company, managers are finding it necessary to have talented supply chain managers to handle their logistics management and strategic supply chain operations.supply chain logistics

As a result, many business schools are now finding courses in supply chain management necessary so as to meet the demand in the employment sector. One thing that a student pursuing a course in supply chain management is guaranteed of is a job upon completion of the course.

Catering to the Need for Educated Supply Chain Managers

There are many universities and colleges that have launched logistics programs with the aim of training and producing professional managers. For instance, Arizona’s W.P Carey School of business just put in a place a six month certificate program which will be offered online. All students pursuing the course will receive the same quality of education since they will be taught by the same instructors who are in the department of supply chain management.

There are many online programs on offer out there: California’s Marshall School Of Business offers an MS in supply chain management. Beyond California, one can also pursue an MBA while specializing in supply chain management at Governor’s School Of Business, which is apart of Tennessee Tech University.

The Importance of Supply Chain Specialists

According to Professor John Fowler, the chairperson in the department of chain supply management in Carey, the MS in supply chain management will help students understand how to manage the company as a whole. China is also looking to produce more executive managers in this sector so as to handle the ever growing manufacturing industry. This is why Carolina’s Kenan-Flager Business School partnered with Tsinghua University which is in Beijing to launch a dual-degree in supply chain management.Supply Chain Manager

More and more business schools are now offering courses in supply chain in conjunction with major companies. Schools of business like Rotterdam and Kenan-Flager had a logistics program ran at Airbus headquarters where students were shown how the whole process of supply chain works. Upon completion of the program, one executive concluded that the reason why Airbus Company has recorded success is because of its sound supply chain department. Additionally, rapidly growing third-party logistics companies are constantly recruiting graduates, such as United Facilities supply chain solutions which offers 12 distribution centers nationwide.

The nature of managing a business nowadays has led to a more complex supply chain. Globalization has made the process longer, riskier and everything is always changing. Due to this, companies are in need of trained talent is this particular field. Apart from the above mentioned institutions, there are many others offering a variety of courses in supply chain management. The online programs have made it possible for more students to enroll for the programs and become professionals in this industry.

Rail-based Logistics: Thriving or Dying?

One of the oldest forms of transportation and logistics is the railway. The development of the steam locomotive engine by the British back in the 18th and 19th centuries was a key piece of the industrial revolution. Fast forward to 2015, and rail continues to be one of the widest uses for transportation and logistics in our modern supply chain.

rail car logisticsSo why has rail logistics continued to advance and maintain its dominance? Commodities that are heavy and needed in large volumes need to be effectively moved from the source location, to that of the customers in order to make it cost effective inputs for the purchaser, and profitable outputs for the manufacturer.

In the North American production of oil in remote regions like North and South Dakota, Texas, and Northern Alberta, transporting the significant amounts of oil being pulled out of the ground can be a challenge. The amount of trucks needed on the road to move the products safely would be so significant, and the volume that each truck could transport, that trucks pinch the ability to move the product through the supply chain quickly.

Pipelines have become increasingly popular in heated debates about safety, cost, and environmental concerns. Trains have long acted as an alternative to pipelines as a relatively safe, and effective way to transport these goods above ground. Existing infrastructure remains across most of the world, and especially through North America’s industrial hubs and into ports from Fort Lauderdale in the Southeast to Vancouver in the Northwest.

Advancements in Rail Systems & Technology

Rail cars have had advancements in the safety of cars to hold dangerous goods from crude oil to other chemicals, allowing safe transport across the country. Unlike treacherous road conditions that trucks can experience driving across the country, trains are able to easily and safely navigate through mountainous snow regions, without the risk of losing their loads.

Rail continues to be a huge piece of the coal and mining industry as well. In 2010, Wyoming was home to the 10 largest coalmines in the United States, including the countries largest producer at the Black Thunder surface mine owned by Arch Coal. This mine alone produced over 115 Million short tons of coal in 2010, an increase from 86 Million in 2007. This coal all needs to get moved somehow, and it can’t be pushed through a pipeline, and would be far too expensive to move by trucks. Trains allow for the goods to be easily moved into port regions like Vancouver, where the coal gets loaded onto ships, and transported to major international manufacturing hubs like China.

4 of the worlds 5 largest coal consumers are overseas: China, Japan, India and Russia. Getting this product out of the ground in the United States and Canada, and transported to the coastal shipping vessels wouldn’t be possible without the continued use and growth in rail logistics and distribution.

A Thriving System for Logistics & Distribution

Rail is versatile, requires very little manpower relative to the amount of weight being hauled, and can easily connect from big cities and manufacturing towns alike. Look no further than the boom in the equity value of railway companies like Canadian Pacific Railway, which has seen a 400% increase in it’s company value since 2005, largely thanks to the boom in Canada’s exports of forestry, oil, potash and even agriculture products like wheat.

The advancements in rail logistics include better traction, braking abilities, power, and assistance in managing the weighing of these massive cars has allowed for incredible efficiency. Companies that have a high degree of specialization, such as the rail scale system offered by Walz Scale have prompted a momentous shift in these systems as a whole.

As a result, these mechanisms have become on of the most effective forms of transportation for anyone looking for effective supply chain solutions and logistic management services. Rail has been the beneficiary of advances in technology from it’s origins in Steam to coal to diesel, and it shows no signs of embracing more changes and continuing it’s dominance as one of the most effective forms of logistics.