Outsourced Logistics: Streamlining and Automating for Cost Savings, Efficiency, and Customer Satisfaction

Authored by Jim Howard, VP of Sales, Digital Services at TRAFFIX

In recent years, outsourcing logistics has emerged as a popular strategy for businesses seeking to optimize their supply chains, improve service, and enhance profitability. This approach often involves enlisting the expertise of a third-party logistics provider (3PL) to manage critical services such as transportation, warehousing, and distribution.  

• Cost Savings:
  • By outsourcing logistics, companies can save costs associated with infrastructure, technology, and labor. 
  • Shippers don’t have to invest in costly technology and don’t need to hire and train logistics staff.
  • Outsourcing can help companies reduce the costs of transporting goods, as 3PLs can leverage their scale and relationships with carriers to negotiate lower rates.
  • 3PLs can also lend industry insights and market intelligence to help shippers stay at or below market prices (in both good and bad freight markets).
• Increased Efficiency:
  • Logistics outsourcing can improve efficiency by allowing businesses to focus on their core competencies and leaving logistics experts to manage the supply chain.
  • 3PLs can access advanced technologies and tools that streamline logistics operations, such as Transportation Management Systems (TMS), Warehouse Management Systems (WMS), and Control Towers.
  • Utilizing data integrations: Shippers of all sizes can better plan loads and provide extra time for their carrier partners to execute and meet exact shipping requirements.
• Improved Customer Satisfaction:
  • ​Outsourcing logistics can improve customer satisfaction by ensuring timely delivery, efficient handling of goods, and accurate tracking and reporting of shipments.
  • 3PLs have the scale and flexibility to manage complex logistics operations in all industry verticals and improve overall customer experience.
  • Continuous improvement: Utilizing data captured and organized by robust business intelligence software, shippers and 3PLs can collaborate to drive meaningful changes within the supply chain.
  • Communication: The partnership allows the 3PL to identify potential risks and disruptions while providing actionable preventions and solutions.

Several industries stand to benefit significantly from outsourcing logistics, particularly: 

• The automotive industry, known for its early adoption of logistics outsourcing, has witnessed remarkable success in streamlining operations and achieving cost savings.
• Consumer packaged goods and retail: In these industries, on-time pickup and delivery are crucial for financial success, and the need for efficient freight and logistics management is evident. Outsourcing logistics allows businesses in these sectors to achieve uniformity across their supply chains, automate processes, and gain real-time freight visibility across all modes of transportation.

Selecting the right 3PL partner is crucial for successful logistics outsourcing. A top-tier 3PL partner is much more than just a service provider:  

• They act as a trusted consultant, helping customers organize logistics data, identify cost savings and opportunities to gain efficency, and tailor solutions to evolving business needs.
• They foster a partnership approach, provide diverse solutions to complex supply chain challenges, and engage stakeholders at all levels of the organization to quickly execute projects.
• They offer tools that streamline and automate logistics operations, including freight procurement, claims management, resolution, and visibility services.
• They collaborate closely with shippers to develop customized solutions to address specific logistics needs.

Businesses can enjoy numerous benefits by outsourcing logistics while maintaining desired control. These advantages encompass cost savings, enhanced efficiency, and improved customer satisfaction. By collaborating with a high-performance 3PL provider like TRAFFIX, companies gain access to seasoned logistics and technology professionals. This partnership streamlines operations and enables a sharp focus on core business activities, allowing businesses to leverage their expertise effectively.