Thursday, October 13, 2011

Transportation, Moving, 3PL’s and the Changing Supply Chain

3PL’s and the Changing Supply Chain

Buehler Logistics Division

In today’s world, as we look toward the changing role of the supply chain as a whole, we must look toward one common identifier, Sustainability. As technology moves forward and world markets change, globalization, risk mitigation, volatile oil prices and sustainability pressures change the landscape of logistics.
As the supply chain has gotten more complex and transportation more expensive as a whole, not to mention the ever raising prices of fuel and maintenance, shippers are paying more attention to their transportation options as a differentiating factor. Manufacturers and Suppliers have to keep products moving, at a lower cost. Customers are no longer stockpiling inventory, making it an “on-demand” marketplace.
Shippers and manufacturers are increasingly deciding that transportation isn't their core-competence and that they’re going to outsource that function, typically to one or more third-party logistics providers
Many shippers are turning to third-party logistics providers (3PLs) for managed services. While this may seem to impose the extra costs of a middleman, many shippers find numerous advantages to outsourcing this function.
First, 3PLs often have enough buying power to leverage lower rates from carriers, and can pass along a portion of those savings to shippers. Another advantage to a 3PL managed approach is the ability to enhance carrier efficiency by combining round-trip freight. Shippers who deal directly with carriers routinely have to pay round-trip rates, because once the carrier gets the goods from Point A to Point B, it has to make a deadhead return trip with empty vehicles. Carriers must factor this unproductive time into their pricing.
3PLs can often match carriers with return shipments, sparing shippers round-trip rates. In addition, carriers can charge less for each leg of the trip, because they can proportionately distribute their increased costs across multiple shippers in one shipment.

Heavy Duty Trucking August 2011
Inbound Logistics September 2011

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