While there’s definitely more than 5 reasons why a company might turn to a third party logistics provider here are a few common ones.
- To provide supplementary supply chain support to test the waters in new regional markets or countries where your company doesn’t currently have a presence without taking the full plunge and opening a new distribution center.
- If you are a company whose business is seasonal in nature using a 3PL provider allows you to scale your warehousing space, labor and transportation to provide full support during the peak months of your business while cutting back during slower months.
- To increase on-time performance and realize efficiencies with the management of your inventory by using a 3PL provider that has superior technology and processes than your in-house operations.
- To take advantage of lower transportation rates provided by logistics firms that have significant buying power due to the volume of freight they deal with and their ability to leverage load consolidation and backhaul opportunities.
- To quickly build a multi-location distribution network with lower risk, without the significant capital investment associated with building out a network on your own.
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