Most businesspeople underestimate the need to outsource storage functions to a 3PL company. Unknown to them, 3PL companies can significantly streamline their business operations and help their companies increase their profitability. Below is an extract discussing how 3PL logistics warehousing works. Hopefully, it will encourage you to hire a 3PL company.
How does 3PL warehousing Work?
3PL warehousing is a service offered by logistics companies to businesses that need to outsource storage services. Typically, the logistics company stores your business inventory or raw materials at a strategically located warehouse. At the warehouse, the 3PL company will manage your inventory by unloading it from trucks and preparing for clients and suppliers. For example, the 3PL could repackage and rebrand your items. Besides, the company sends real-time reports to ensure you are well aware of the number of products in storage.
What Are The Benefits Of 3PL Warehousing?
Your business may spend significant resources on storage. Typically, you must build or lease a warehouse to store inventory or raw materials. Once the products are in the warehouse, you must hire warehouse staff and buy equipment such as forklifts, pallet jacks and cranes. Moreover, you need insurance coverage to cover your workers and the products in storage. Numerous working hours are spent managing the warehouse. Besides, your business makes losses during the low season since you have to pay for storage space that you do not need.
3PL warehousing eliminates the extra costs and working hours spent managing a warehouse. Typically, the storage company evaluates your business operations and distribution routes and suggests suitable warehouses to store your products. For instance, the company could store your inventory in warehouses close to your major markets. This way, clients do not have to travel long distances to pick up their orders. The storage contract provided by 3PL companies allows you to increase or reduce the rented storage space depending on your business cycles. This way, you do not have to pay for storage space if you do not need it. Finally, the 3PL insures and takes responsibility for your items while in storage.
How do you choose A 3PL Warehousing Company?
A major concern when hiring a 3PL warehousing company is its reliability. Ask for recommendations from other businesspeople and check online reviews to identify 3PLs that offer quality services. Then, examine the operating routes of the company to determine if it is a good match for your business. You also need to assess the company's pricing and incentives. For example, you might prefer companies that offer cold storage, bonded warehouses or those whose facilities operate 24/7. Finally, visit the company's warehouses to establish how they operate and whether they are suitable for your products.