7 Benefits of Managed Logistics for Your Business
Managed logistics is a service that allows businesses to outsource some or all of their shipping operations to a third-party provider. By partnering with a managed logistics provider, businesses can gain access to supply chain expertise, technology, transportation network and cost savings. In this article, we will explore some of the benefits of managed logistics for your business.
Key takeaways
Managed logistics is a service that allows businesses to outsource some or all of their shipping operations to a third-party provider.
Managed logistics can provide benefits such as improved efficiency, reduced costs, enhanced customer satisfaction, increased focus, scalability, innovation and competitive advantage.
Managed logistics requires choosing the right provider, measuring the success, overcoming the challenges and getting started.
1. Improved efficiency and visibility
One of the main benefits of managed logistics is that it can help you improve the efficiency and visibility of your supply chain. A managed logistics provider can analyze your shipping data and implement strategies such as mode optimization, vendor consolidation, network design and order optimization to reduce waste, lower costs and increase service levels. Additionally, a managed logistics provider can offer you advanced technology such as a transportation management system (TMS) that can help you track and manage your shipments, communicate with carriers and vendors, generate reports and invoices, and access real-time data and analytics.
2. Reduced costs and risks
Another benefit of managed logistics is that it can help you reduce your costs and risks associated with shipping. A managed logistics provider can leverage its transportation network and buying power to negotiate better rates and terms with carriers, as well as provide you with access to a variety of modes and services that suit your needs. Moreover, a managed logistics provider can help you mitigate the risks of freight damage, loss, theft, delays, compliance issues and market fluctuations by providing you with insurance, claims management, audit services, sustainability reporting and market intelligence.
3. Enhanced customer satisfaction
A third benefit of managed logistics is that it can help you enhance your customer satisfaction and loyalty. By working with a managed logistics provider, you can ensure that your orders are delivered on time, in full and in good condition to your customers. You can also offer your customers more options and flexibility in terms of delivery modes, speeds and locations. Furthermore, a managed logistics provider can help you improve your customer service by providing you with proactive communication, tracking information, issue resolution and feedback.
4. Increased focus on core competencies
A fourth benefit of managed logistics is that it can help you increase your focus on your core competencies and grow your business. By outsourcing some or all of your shipping operations to a managed logistics provider, you can free up your time, resources and capital that you can invest in other areas of your business such as product development, marketing, sales and customer retention. You can also leverage the expertise and experience of the managed logistics provider to gain insights and recommendations on how to optimize your supply chain strategy and performance.
5. Scalability and flexibility
A fifth benefit of managed logistics is that it can provide you with scalability and flexibility to adapt to changing market conditions and customer demands. A managed logistics provider can offer you a customized solution that fits your specific needs and goals, as well as adjust to seasonal fluctuations, peak periods, new products or markets, or unexpected events. You can also choose the level of involvement and control that you want to have over your shipping operations, from fully outsourcing them to partially managing them.
6. Continuous improvement and innovation
A sixth benefit of managed logistics is that it can enable you to achieve continuous improvement and innovation in your supply chain. A managed logistics provider can provide you with ongoing support, monitoring, evaluation and feedback on your shipping operations, as well as identify opportunities for improvement and innovation. You can also benefit from the best practices, industry standards and latest technologies that the managed logistics provider follows and implements.
7. Competitive advantage
A seventh benefit of managed logistics is that it can give you a competitive advantage in the market. By partnering with a managed logistics provider, you can gain access to a range of benefits that can help you improve your supply chain performance, reduce your costs and risks, enhance your customer satisfaction, increase your focus on core competencies, scale up or down as needed, achieve continuous improvement and innovation, and ultimately differentiate yourself from your competitors.
Tips
- Choose a managed logistics provider that aligns with your business goals and values.
- Communicate clearly and frequently with your managed logistics provider to ensure alignment and collaboration.
- Review and update your shipping operations and processes regularly to optimize your supply chain performance.
- Seek feedback from your customers and stakeholders on your shipping operations and service quality.
- Embrace change and innovation in your supply chain to stay ahead of the competition.
Managed Logistics: A Growing Industry
Managed logistics is the process of outsourcing some or all of the transportation, warehousing, distribution, and inventory management functions to a third-party logistics provider (3PL). Managed logistics can help businesses reduce costs, improve efficiency, and enhance customer service.
Global Demand for Managed Logistics
According to Statista, the global logistics industry was worth over 8.4 trillion euros in 2021 and is expected to exceed 13.7 billion euros by 2027. The Asia-Pacific region accounts for the largest share of logistics costs, while the United States is the largest 3PL market in the world. The main drivers of the growing demand for managed logistics are:
- The boom of e-commerce, which requires fast and reliable delivery of goods to consumers.
- The increasing complexity of supply chains, which involves multiple modes of transportation, cross-border regulations, and environmental challenges.
- The rising customer expectations, which demand greater visibility, flexibility, and customization of logistics services.
Benefits of Managed Logistics
Managed logistics can offer various benefits to businesses that want to optimize their logistics operations and gain a competitive edge. Some of the benefits are:
- Cost savings: Managed logistics can help businesses reduce their fixed costs, such as labor, equipment, and facilities, and take advantage of the economies of scale and expertise of the 3PLs.
- Efficiency improvement: Managed logistics can help businesses streamline their processes, eliminate waste, and improve their productivity and quality.
- Customer service enhancement: Managed logistics can help businesses improve their customer satisfaction and loyalty by offering faster delivery, better tracking, and more options for returns and exchanges.
Managed logistics is a growing industry that can help businesses cope with the challenges and opportunities of the global market. By outsourcing their logistics functions to a 3PL, businesses can save costs, improve efficiency, and enhance customer service. Managed logistics is expected to be the fastest-growing industry between 2023–2030, as e-commerce, supply chain complexity, and customer expectations continue to increase.
Frequently asked questions
Q: What is the difference between managed logistics and freight brokerage?
A: Managed logistics is a service that offers supply chain expertise and a wide range of logistics services to businesses that need support. Freight brokerage is a service that connects shippers with carriers and negotiates rates.
Q: How do I choose the right managed logistics provider for my business?
A: You should consider factors such as the provider’s experience, reputation, network, technology, services, pricing, communication and customer service.
Q: How do I measure the success of my managed logistics partnership?
A: You should establish clear goals and key performance indicators (KPIs) for your supply chain, such as cost, service, quality, speed and sustainability, and track and evaluate them regularly with your managed logistics provider.
Q: What are some of the challenges or drawbacks of managed logistics?
A: Some of the challenges or drawbacks of managed logistics may include loss of control, lack of transparency, cultural differences, contractual issues or service failures.
Q: How can I get started with managed logistics?
A: You can get started with managed logistics by conducting a needs assessment, identifying your pain points and opportunities, researching potential providers, requesting proposals and quotes, comparing options and selecting a partner.
References:
http://www.na-businesspress.com/jsis/misraweb.pdf
https://arcb.com/blog/beginners-guide-to-managed-logistics
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