A Guide On 3PL Logistics Warehousing
Outsourcing storage services to a third-party logistics (3PL) company is a sure way to streamline your business operations and save the costs of renting or building a storage facility. This article details how 3PL warehousing works so that you will have an easier time engaging the 3PL warehousing providers.
How Does 3PL Warehousing Work?
3PL logistics warehousing is an arrangement where another company stores your inventory or raw materials in their warehouses. Usually, companies will handle all aspects of your company's logistics. As such, they will transport the items from your premises to the warehouse. 3PL warehousing companies have strategically located warehouses in every corner of the country. Therefore, they aid in distributing your products since clients do not have to visit your premises to pick up their orders.
What Are The Benefits Of 3PL Warehousing?
Below are the reasons why your business needs to hire a 3PL warehousing provider:
- 3PL warehousing services reduce the stresses of running your business. You concentrate on core activities such as production and marketing without the hassles of worrying about storage space.
- 3PL warehousing companies can offer additional services such as cold storage and repackaging your products.
- 3PL warehousing companies can help you save costs. Typically, they adjust their pricing based on the products in the warehouse. As such, you incur meagre storage costs during the low season.
- The companies give real-time data regarding the inventory in their warehouses. This guides your production team since they know the items needed to replenish your stock.
Choosing A 3PL Warehousing Company
Start by assessing the company's ability to store your products. For example, if you deal with perishable items, inquire whether the company has cold storage facilities. Additionally, assess the company's network of warehouses. The rule is that they should be located in your major markets or along your distribution routes. It is prudent to interview the company's customers to establish the quality of services that you will receive. Consider 3PL companies that go the extra mile to ensure customer satisfaction.
Negotiate the company's terms of engagement. For example, what is the minimum storage space you can take at their warehouses? Can the company increase or decrease the storage space to suit your business need? What additional services can the 3PL offer? Does the company insure the products in storage? Negotiate for a flexible contract whose terms can change to adjust to the prevailing business environment. Finally, assess the pricing and payment terms. Negotiate for reasonable rates and friendly payment terms that do not affect your working capital.