This article was written by Michael Rogers of 4 Way Logistics and appeared recently on his blog.
When you are running a small to medium-sized business and regularly ship small packages and parcels, you face certain challenges that your larger competitors do not have to overcome. Companies that ship thousands of small packages a week often get lower rates and better service than their counterparts who may only ship 25 or 50 parcels each week. A 3rd party logistics company (3PL) can help you overcome those challenges so you can stay competitive with your larger competitors and crush your smaller competitors. Take a look at five of the most common challenges and see how a 3PL can provide the solution to each of those challenges.
- Complex rules are hard to understand and shipping costs are high
Big package delivery companies like UPS and FedEx have strict and complex rules that govern every aspect of the shipping and delivery process. As a small business owner, you may not have the time or inclination to read through all of the rules before shipping a package. Do you know the size and weight limitations on parcels? Do you know what is or is not allowed to be transported? What happens if your parcel is lost or arrives in damaged condition? In addition to understanding the terms of service, you also have to be concerned about price. What you pay for a shipment can depend on the level of service, when you want your parcel delivered, insurance, and a number of other factors. A 3rd party logistics company is familiar with all of the complexities and can find ways to lower your shipping costs.
- Carrier shipping information systems are basic and of limited value
Carriers have their own platform that is designed to track packages and provide a limited amount of information to customers. If you want better and more useful reports to analyze your shipping costs and budget for the future, your 3PL partner can custom design the type of reports that will better meet your needs.
- Complex pricing structures and numerous transactions leads to errors and overcharges. Costly audits need to be done in a more affordable way.
Carrier supplied software does not make it easy for you to retrieve the information you need to do a thorough audit of the charges you incurred. Rather than investing hundreds of manpower-hours and thousands of dollars in custom software to audit your freight bills, you can turn the job over to your 3PL provider. They have the technology and trained staff to do a thorough audit, saving you time and money.
- Choosing your best shipping option is difficult
While price may be the most important factor in deciding how to ship your parcels, there are other factors to consider. Does one carrier offer better customer service than another? Can you have your packages picked-up or delivered after business hours or on the weekend? Is it more affordable to ship your packages with an LTL carrier rather than a parcel delivery company? All of these questions, and more, can be answered objectively by your 3PL provider so you can make the smartest shipping choice.
- How can you avoid being penalized with higher rates when you are a low-volume shipper?
A 3PL can help you leverage other shipping and volume contracts to help you get lower rates. A postal consolidator is one type of arrangement that will lower your shipping costs and allow you to compete with your larger competitors and crush your smaller competition.
Question: Does small package delivery seem too costly?