| The day and age of Freight Shipping has seen a | | | | their customers. Or the faster they can bring materials |
| drastic change over the last 15 years. There was | | | | to their facility for production, the faster they can get |
| once a time wherein a Traditional Freight Carrier would | | | | their product out to market. Just in Time Management, |
| dominate the Heavyweight shipping market with it's | | | | also begins to play a part in a Supply Chain, which |
| large fleet of vehicles, brand name recognition, and it's | | | | leads to customers being able to keep less inventory, |
| so-called ability to service their customers total shipping | | | | and build on demand for better efficiency. TC's can |
| needs. | | | | have great transit times in some areas, but be slow in |
| Much like the deregulation of the Telecommunication | | | | other areas-typically they give you very little options to |
| Industry in 1996, when smaller companies were finally | | | | improve the transit time. |
| allowed to take part in the booming market of | | | | 3) One Stop Shopping- The idea of being able to go to |
| telecommunications, the freight industry witnessed a | | | | a single source and having all the resources that is |
| resurgence, wherein smaller Regional carriers began to | | | | needed is huge. The Y2K age has brought about the |
| understand that there was a market for them. By | | | | need for speed. Shippers are constantly searching for |
| specializing in smaller sections of their local areas, | | | | more efficient ways to get their job done. Better |
| these companies began to develop a niche. The larger | | | | technology, more resources, shorter lead times are a |
| carriers had a choice to make, whether or not they | | | | few of the reasons that shippers have turned to 3PL's. |
| wanted to compete, or concede these lanes, and they | | | | The ability to go to an online site, have competitive |
| elected the ladder. Although the Freight Industry didn't | | | | rates in place from a myriad of carriers, and be able to |
| have any "mandates" on customers having to use | | | | track and trace those shipments, have taken the place |
| certain carriers, the big guys seemed to corner the | | | | of the 800 lb. shipping gorilla. As mentioned already |
| market on virtually all heavyweight shipping needs, | | | | TC's are very vanilla, and you get what you get. |
| mainly because of their size and notoriety. | | | | 4) Versatility- 3PL's allow for small, to medium size |
| Fast forward to 2010, and yet another entity has | | | | companies, the ability to align resources with business |
| developed, and taken the Transportation Industry by | | | | objectives. By using a 3PL, the small guys can make |
| storm. The concept of Third Party Logistics has swept | | | | themselves seem larger in the market place. TC's align |
| through the shipping industry and transformed the way | | | | themselves with the larger Fortune 500 companies, |
| companies do business. | | | | and service the smaller companies as a means to an |
| 3PL's came along and decided, to not just focus on a | | | | end. |
| customers small parcel business, or heavyweight | | | | 5) Total Supply Chain Management- A company has |
| freight business, but to take a look at their entire supply | | | | the ability to control costs and efficiency throughout |
| chain. So they came up with the idea of going to the | | | | their whole supply chain with a 3PL. A traditional carrier |
| small parcel industry, the large traditional carriers, the | | | | allows specific lane costs cutting, but doesn't look at |
| regional carriers, and the freight forwarding community | | | | the customer's Supply Chain as a whole. |
| to negotiate rates, to go out and offer ALL services to | | | | 6) Convenience- The ability to deal with 1 company for |
| a client base. To say the idea worked would be an | | | | multiple services far outweighs having to deal with |
| understatement, the 3PL market today is in the area | | | | multiple companies for single service.Also, your |
| of $110 billion dollars. | | | | accounting department will love you. as using multiple |
| Below are the top 7 features and benefits of using a | | | | TC's can cause much confusion in the accounting |
| Third Party Logistics company over a Traditional | | | | department. |
| Carrier: | | | | 7) Partners- If you can find a 3PL that is looking out for |
| 1) Flexibility- Having the ability to choose from multiple | | | | your best interest, they can become a partner of |
| carriers who specialize in certain regions of the USA, | | | | sorts. A good 3PL will be constantly looking out for |
| benefit customers in that in many cases, the traditional | | | | their customers best interest, throughout the life of the |
| carrier may not have a solid distribution process to a | | | | relationship. They have no biases toward any one |
| certain destination, thus being able to pick from multiple | | | | carrier or methods that you are used to get the job |
| resources, allows the customer to plan more | | | | done. Traditional Carriers are heavily biased and will |
| strategically to enhance their Supply Chain. TC"s are | | | | only help you, as long as you are doing business with |
| very predictable, long haul or short haul shipping, is | | | | them. |
| what they do. | | | | A third party logistics company, or abbreviated 3PL or |
| 2) Improved Transit Times- The ability to better one's | | | | TPL, is a firm that provides a one stop shop service to |
| transit times means the faster they get their product to | | | | its customers of outsourced services or parts, or all of |
| market, thus speeding up the time they are paid from | | | | their supply chain management functions. |