Separating fact from fiction can be hard, especially when it comes to outsourcing. So we’ve taken on five of the most popular 3PL myths and laid the rumors to rest.
Third party logistics (3PL) providers have grown increasingly popular in the past few years. Combine that popularity with the onset of a global pandemic and the need for reliable 3PLs has skyrocketed. In fact, Supply & Demand Chain Executive’s new Global Market Insights Inc. report found that the global 3PL market would surpass $1,800 billion by 2026.
But some businesses are still hesitant to dip their toes into outsourcing. And for good reason. Choosing a 3PL is a tough decision; one that should be made based on strategy, data and the relationship with the third party. Sadly though, there are a lot of myths surrounding 3PLs that lead to this hesitation.
To help, we’ve taken a look at the five most common myths surrounding third-party logistics providers and separated fact from fiction.
5 3PLs Myths Debunked
3PL Companies Are Expensive
Working with a 3PL is an investment, but one that ultimately helps reduce overall costs. When you work with a 3PL, your company is able to save time, resources and staffing that help with overall budget plans. Here at WSI, we believe this myth grew from external suppliers that saw themselves as simply a stepping stone in the supply chain. Our company works to build relationships with our partners, understanding your goals and objectives and using your investment in our services to help boost efficiencies and reduce cost.
Debunked: the investment is worth the price tag to increase your bottom line.
Hiring a 3PL means giving up control
Lots of growing companies believe that in-house supply chain management allows them to control all the touch points in their supply chain. And by utilizing a 3PL, they’re actually giving up control. Unfortunately, many of these companies don’t have the bandwidth to effectively manage the minute details of their operations, which can lead to even less control.
The truth is that hiring a 3PL should actually give you greater control over core aspects of your business. Ronnie Davis writes “Most 3PLs today are set up to give better visibility and control to the owners and managers. The logistical planning is maintained by the 3PL, but the owners and managers are still in full control of all processes.” By outsourcing all or a part of your operations, companies can go back to focusing on new business opportunities and revenue generating activity, leaving the rest to their third-party logistics partners.
Debunked: hiring outside help can lead to greater control over core business initiatives.
Myth #3: 3PL Companies Don’t Understand Your Company Culture
Just like during the interview process for a new hire, if the person doesn’t appear to be a good fit for your team and match your core values, they aren’t the right person for the job. The same is true with a 3PL. When looking to work with an external third party, finding a company that embodies that same culture is key.
This myth is easy to debunk when you build a relationship with your 3PL based on trust, communication and understanding the culture of your company. When you share the same goals and objectives and agree on how you want to achieve those goals, the relationship with a 3PL can be unstoppable.
Debunked: align on company culture through relationship building with your 3PL
Myth #4: Third-party logistics degrades the quality of customer service
In full transparency, customer service can suffer if you hire the wrong 3PL. It’s imperative companies fully vet any potential third-party logistics providers ensure past customer service experience throughout the order fulfillment process. Don’t be afraid to reach out to current or former customers and ask about their experiences. Read online reviews and ask questions. The right 3PL will actually increase customer satisfaction and loyalty.
Debunked: 3PLs can boost customer satisfaction and reduce fulfillment challenges.
Myth #5: “My company is just starting. I don’t think it’s big enough for a 3PL.”
By far the easiest myth to debunk is about the size of a company working with a 3PL. Here at WSI, we often hear “we’re too small to outsource.” and it’s simply not true. 3PL services can benefit companies of all sizes and scopes.
Every business needs to prioritize order fulfillment and consistency in the customer experience. A quality 3PL can customize their services to meet your business goals. By understanding your unique business objectives and challenges, the right 3PL will innovate efficiencies to streamline processes, reduce cost and minimize obstacles.
Debunked: no company is too big or too small to benefit from 3PL services.
It’s easy to get lost in the noise of why in-house supply chain management is ideal. But once you separate fact from fiction, a relationship with a quality 3PL can be the catalyst to taking your business to the next level. At WSI, we believe in small town values on a big league scale. As one of the largest privately held logistics companies in the United States, with distribution centers strategically located near major metropolitan areas, we have the capabilities to help your business excel.
Contact us today to learn more.