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Think you are not large enough to leverage a 3PL partnership? Think again!

Posted by Mike Pallo

Across the United States, there are more than 30 million small businesses. Each enterprise is unique in terms of product or service offering and vision. However, by necessity, they all share common goals. They want to exceed customer expectations, have the flexibility to scale up or down based on the markets in which they compete, and maximize profit by controlling costs.

Shippers with a freight spend of $5M annually or less experience transportation cost of >10% of sales compared to their larger competitors, which spend approximately 3% of sales revenue on transportation according to Logistics Management's Annual Study of Logistics and Transportation Trends. Thanks to the evolution in the 3PL industry, all shippers can now leverage the technology and buying power funded by a community of shippers through a 3PL relationship to achieve the same expense ratio as their larger peers, evening the playing field.

Often 3PLs offer no implementation fees and access to powerful TMS systems at reduced rates or no cost, empowering shippers to reduce their freight rates and deliver hard dollar savings on day one of the partnership. The barrier of high TMS system costs has been removed!


Data and Technology

In the past, companies often needed a comprehensive IT infrastructure and elaborate staff to configure, maintain and operate technologies like transportation management systems, automated carrier qualifying, and integrated freight audit and settlement populating business intelligence tools. Today, many 3PL technology solutions are multi-tenant, cloud-based applications that do not require integration to your ERP system nor the in-house experience to maximize their benefits. The speed to value has never been greater or completely self-funding as it is today.


Access to Reliable Capacity at Stable, Competitive Rates

Finding capacity in a constrained market while meeting strict service requirements to maintain a positive customer experience is not an easy task. By partnering with a 3PL, companies gain access to a wider range of qualified carriers operating at pre-negotiated, volume-based rates which any single shipper cannot achieve on their own. By joining the 3PL's community of shippers and carriers, you win and transfer your fixed operating cost to a purely variable expense.


Logistics Expertise on Demand

A 3PL partner like Kenco provides access to skilled resources such as TMS Super Users, freight procurement professionals, logistics engineers, and operational expertise that can be accessed to create reliability while reducing costs. Kenco's Supply Chain team uses advanced analytics capabilities and proven process management practices to help companies of all sizes address short or long-term business goals. From one pain point to a holistic view across a network, Kenco helps customers identify opportunities, and if requested, implement solutions.


Focus on Your Passion

Some of the most common attributes of small business owners are an entrepreneurial spirit and a desire to be one's own boss. Partnering with the right 3PL provider gives all shippers the ability to focus on their core business while having the peace of mind knowing their transportation network is managed by industry experts without having the costs of hiring each supply chain discipline and supporting technology. You focus on your passion and allow a partner like Kenco to manage what we are passionate about – transportation.

Topics: Transportation
Mike Pallo

Written by Mike Pallo

Mike Pallo serves as the Vice President of Transportation Sales at Kenco.


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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.