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3 Reasons Outsourcing Logistics Is Rapidly Replacing "Insourcing"

Posted by David Caines


According to Inbound Logistics91 percent of service providers grew their client base by at least 5 percent last year. And with this number on a steady rise since 2010, it is easy to see why so many of them are turning to 3PLs to outsource their logistics.

While shippers are busy growing their core business, they understand it's time to leave the logistics up to someone else.

Why is outsourcing continuing to grow at such a great rate? Outside of the heavy investment toward innovation, 3PLs are all about building efficiencies--and we've been working hard to make our process as efficient as possible.

If you're curious about outsourcing logistics, see the 3 main reasons service providers across all industries are choosing outsourcing to get the job done right:

1. We are the Subject Matter Experts

When you choose to outsource, you can focus on what you do best: making and selling products. There's no need to worry about how things get from point A to B and all of the nuances in between. Words like MercuryGate, TMS, DCC, freight brokerage, and integrated supply chain solutions are all a part of the acronyms and jargon we deal with so you can get back to running your business.

The thing is: we live, eat, sleep, and breathe logistics (okay, maybe we don't eat it, but you get the point.)

With over 90 distribution facilities and over 200 clients, our 60 years of experience have given us time to learn a thing or two about logistics. With every client, we focus on developing partnerships that fit their specific industry needs. Solutions are customized in order to evolve their supply chain from an operating cost to a competitive advantage.

Enabling a 3PL to leverage their industry experience and best practices allows your company to focus on your product while we handle the rest.

2. Better Performance and Quality

When it comes down to it, 3PL providers are all about creating efficiencies in every step of the supply chain. We focus on continuous improvements for quality management and Lean Six Sigma disciplines. And when we do this, we create a cohesive strategy that increases quality and performance across the board.

Whether you need storage space and inventory management, or you operate an enterprise level company that needs dirt-to-dirt logistics, handing over the reins of your logistics, distribution, and inventories allows the cohesive strategies to really start working.

If you hit a road block, like needing more distribution space, 3PLs are already prepared with the knowledge and capacity to solve your problem quickly. We know how to solve your problem the right way, on the first try. If you produce more product, we will move more product. 3PLs will grow with your company to make sure everything is operating as efficiently as possible.

Take inventory, for example: We can review your existing equipment, current utilization, and areas of need and budget. Then, we can offer recommendations on what product type, brand, and model you should use to best fit your operational and budgetary requirements, all while making you more efficient.

We understand the outsourcing value proposition has to be better than the insourcing cost, and that's why Kenco often sets up pain/gain share arrangements to provide a quality, world-class service that's backed by a guarantee. Service levels, productivity, and other metrics are tracked in a scorecard---if the proper levels aren't achieved, Kenco bears a pre-agreed share of cost overrun.

3. Data Is Plentiful, Information Is Scarce

Nowadays, every company is collecting some sort of data. Whether it be about users or operations, the most important part of data is analyzing it to get the best information out of it. Decades of industry experience have helped us understand our clients quickly and establish smart benchmarks based around the right data points for each company.

We provide analytics every step of the way to share knowledge---by providing you with the right information, we can execute the right plans at the right times together.

Tools like data integration, visual modeling, and multi-dimensional analytics are just a small part of the visibility between the Warehouse, Yard, Order, Labor and Transportation management system data libraries. By crunching all of this data, you get the best information laid out in a simple report--no work needed on your end.

To Sum It All Up

3PLs have seen amazing industry growth because we know how to best handle our industry: supply chain logistics. Years and years of learning the best practices and how to handle all the bumps along the way has put 3PLs in a place that provide some of the best data analytics out there, with performance and quality of service to match.

See what you need to know to choose the best 3PL for your company now with our eBook, Selecting & Managing a Third-Party Logistics Provider – Best Practices. The included checklist will help you evaluate your many different provider options once you start searching! 

Best Practices Selecting a 3PL

David Caines

Written by David Caines

David Caines is the Chief Operating Officer (COO) for Kenco


We'd like to hear about your supply chain and discuss ways Kenco can help address your business needs.

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Kenco Logistics

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Kenco provides integrated logistics solutions that include distribution and fulfillment, comprehensive transportation management, material handling services, real estate management, and information technology—all engineered for Operational Excellence. 

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