From Fortune 500 to Small-Scale Shippers, 3PLs are Becoming the Gold Standard

Posted by Harriet Mills on Jul 17, 2013 4:45:10 PM

We have been offering customers freight brokerage services for over 25 years and we still get shippers saying "We don't use brokers." For some companies, that would be the end of the conversation, but not here at Choptank Transport. We know from experience that some shippers may harbor preconceived notions about 3PLs from hearsay or a single bad experience, but the industry as a whole, its demands, capabilities and reputation are rapidly changing, and we are determined to let our customers know why.

  

A recent report published by Armstrong & Associates, a leading market research and consulting firm specializing in strategic planning and logistics outsourcing, cites that 86% of Fortune 500 companies use 3PLs.

 

The report goes on to say that big shippers such as General Motors, Procter & Gamble, and Wal-Mart each use 50 or more 3PLs! If these super shippers know the value that third party logistics companies add to their businesses, it is hard to understand why there is still hesitation from some. The fact is that freight brokers are no longer viewed as the black sheep of logistics. They are now considered by many as the gold standard of supply chain management, recognized for the value they offer shippers.  

86% of Fortune 500 companies use 3PLs  

This report also indicates that outsourcing trends are changing, and rapidly too. "Of the total 6,398 3PL/Customer relationships [in the study], 1,184 or 18.5% are strategic with the 3PLs performing supply chain management and/or lead logistics provider services." Additionally, "...there are increasing numbers of strategic relationships within the Retailing and Industrial industries."

Freight brokers are no longer viewed as the black sheep of logistics. They are now considered by many as the gold standard of supply chain management, recognized for the value they offer shippers.

Companies that maintain their own fleet know just how costly it can be. In addition to driver's pay and stacks of paperwork, there is equipment to service and maintain. Add to that the arduous task of keeping up with state and federal FMCSA rules, regulations and requirements. Trying to keep up with it all while taking care of other responsibilities, such as warehousing and inventory control, can be daunting.

Hiring your own independent owner/operators can be a challenge too, not to mention time-consuming. Unless you have a large database of current, approved, reliable owner-operators, it may prove difficult to find the right truck at the right time in the right place.

3PLs offer …

  • Nationwide access to thousands of carriers
  • A qualified carrier selection process with daily updates & constant verification
  • Negotiating power
  • The latest technology for efficient planning and real time visibility of shipments and paperwork
  • Knowledge of current state & local freight/carrier laws and regulations
  • A single point of contact for all things logistics!

 

But like anything else, you have to do your homework.  Select a 3PL that is financially stable and has a good reputation.  

 

Hopefully one day the phrase “We don’t use brokers” will become a thing of the past.

 

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