11/27/2012
Shippers and Logistics Providers: A Great Team
Shippers are getting better at identifying the requirements for and what they expect out of a 3PL relationship. They want their 3PL partners to anticipate their problems, continue to make process improvements, and save them money.
In turn, logistics service providers are developing creative solutions and collaborating with shippers to improve processes and profitability. Shippers are using top logistics companies to help with strategic planning and a holistic analyzing of the supply chain. Effective cost reduction isn’t saving dollars in separate pieces of the supply chain, but setting up an integrated infrastructure to minimize risk, balance cost across the entire operation, and focus on continuous improvement.
Shippers have also become more selective about engaging outside help. Many potential customers that have not outsourced in the past are now actively exploring that option, but are also demanding high performance and ROI. Customers are looking for confirmation that savings and improvements have been achieved.
Here’s some things that you, as a shipper, should consider when working with one or more logistics providers:
• Consider logistics outsourcing for some or all logistics operations as you expand. Due to time constraints, regulations and compliance that mitigates risk, logistics providers may provide value. 3PLs also help ensure that a shipper can find transportation capacity in a tight truck market.
• Assess whether having a lead logistics provider makes sense if your company has operations and lanes in multiple regions.
• Before signing a big contract for logistics IT or transportation management, consider a limited trail in one area and use any lessons you learn to make adjustments if you expand the contract.
• Benchmark the performance of your existing logistics operations to determine how current providers are performing, and if a logistics provider offers any benefits. Establish key performance indicators (KPIs) to measure results and procedures. Collaborate and share data for continuous improvement in your supply chain.
