Across the United States, there are more than 30 million small businesses. While each is unique in terms of product or service offering and vision, by necessity, they all share some common goals. They want to meet or exceed customer expectations, have the flexibility to scale up or down based on markets in which they compete, and to control costs – including transportation.
With consumer expectations increasing and capacity in ground shipping becoming constrained, controlling transportation costs becomes more challenging – especially if a company's time and resources are needed to focus on their core business, not the logistics of sourcing suppliers or final delivery of products. Choosing to partner with a third-party logistics provider to manage part or all of its transportation network allows smaller shippers many benefits, including data and technology resources, access to a wide range of carriers and rates, and logistics expertise needed to address a specific situation – expanding in a new market or experiencing strong seasonal demand for products.
Data and Technology
In the past, companies often needed a solid IT infrastructure and staff to take advantage of technologies like Transportation Management Software (TMS). Today, many TMS solutions are cloud-based offering more choices for small shippers. However, with new technologies being promoted every day, the task of vetting and selecting the best tools to meet specific business needs can be daunting.
Kenco Logistics is one of the few 3PL providers to operate Innovation Labs to actively test and vet numerous emerging technologies. This ongoing research benefits shippers because Kenco can recommend specific solutions based on the client's unique needs. In other words, you can drive home a new car, without searching on Craig's List, haggling over price, or kicking the tires.
Access to Carriers and 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, small shippers gain access to a wider range of carriers. Rates are another factor to consider. As eCommerce evolves and surcharges from some carriers become more prevalent, managing transportation costs is even more challenging. Small shippers can benefit from having a partner with their fingers on the pulse of the market. An experienced 3PL can engineer solutions to help mitigate those changes.
Companies can also partner with 3PLs to create capacity. Whether looking to meet a change in demand or a spike in rates due to tight capacity, a 3PL -managed Dedicated Contract Carriage (DCC) program gives companies greater agility.
The 3PL provider is responsible for purchasing the equipment, ensuring compliance with all regulations, and maintaining the assets to avoid service failures due to equipment being out of service. Small shippers can access one truck or multiple units for the time required to meet their needs- without tying up capital needed for other operating expenses or adding staff with specialized skills in managing transportation.
Logistics Expertise on Demand
Some 3PL providers, like Kenco, have extensive skilled resources with logistics engineering and supply chain management that can be accessed by small shippers to address one pain point or a holistic view of their operations. Kenco's Supply Chain Solutions team uses advanced analytics capabilities and proven process management practices, including Lean Six Sigma, to help companies of all sizes address short or long-term business goals.
Some of the most common reasons cited for starting a small business are an entrepreneurial spirit and a desire to be one's own boss. Partnering with the right 3PL provider gives small shippers the ability to exponentially expand resources economically while maintaining control of their operations and the independence that may have inspired the decision to start a new business.