The Financial Benefits of Third-Party Logistics

As businesses expand and gather more customers, they can find it a challenge to keep up with the growth. One option is to hire more employees in order to meet the growing customer demand.

Hiring more employees poses more challenges, however. It may set back the business with training time and expense to make sure the new hires understand the tasks at hand and what is expected of them.

Another option to is to retain a third-party logistics specialist. A firm that knows the territory can be used to outsource functions of your company to reduce overhead and operating costs, such as operations, warehousing, and transportation, depending on your company’s particular needs.

Financial benefits of third-party logistics

A third-party logistics firm can provide background accounting services like bill auditing, coding, assignment, and disputed charges so that the client company doesn’t have to deal with these issues. Although there may be a monthly fee for these services, it’s typically offset by the money saved through the use of the third party.

— Third-party logistics can increase profits via the use of process automation. It can eliminate the act of under-billing by accurately charging the correct amount for every product that is shipped without error.

— Savings can come from the cost of direct freight. The third party will consolidate shipments and leverage shipping business with carriers in order to receive discounts.

— Staff reduction can be considered a saving when you use a third-party logistics firm because they handle the background work and your business will no longer need employees to deal with carriers, research routing, and handle cost and accounting issues. The third party will handle these problems and tasks for the client.

— A third-party logistics company can also improve customer satisfaction. Timely delivery of the product keeps customers coming back to your operation for goods and services, and creates more revenue for the company. The third party will be the link between the customers and your firm, and provides the service that keeps your clients returning for more.

Business that have complex shipping structures can benefit greatly from the use of third-party logistics, but determining if the company is a good fit is a necessary step, of course.

Creating a solid and firm relationship with your logistics partner can be productive for your company’s structure as well as its financial well-being.

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