WHITE PAPER. How 3PLs Can Help with Small Business Growth

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1 WHITE PAPER How 3PLs Can Help with Small Business Growth

2 In Brief This white paper examines some of the biggest obstacles faced by small business owners and highlights the benefits of outsourcing logistics needs through a third party can have on your business. Contents Introduction 3 Solution 3 Saves You Time 3 Saves You Money 4 3PLs Keep You Up-To-Date with Technology 5 It Takes Responsibility off Your Shoulders 6 About FreightCenter 7 Conclusion 7 FreightCenter How 3PLs Can Help with Small Business Growth

3 Over 85% of Fortune 500 companies outsource their logistics needs to a Third Party Provider (3PL). 2 Introduction Running a small business requires lots of personal sacrifice and can be stressful for small business owners. Working ten to 12 hour days can be exhausting and leaves little time to spend with friends and family. Many small business owners find themselves juggling multiple responsibilities and often feel they are spreading themselves too thin. 1 This means that when problems arise in other areas, tending to the issue can be a challenge. Solution Outsourcing the logistics needs of your company can take some of the responsibility off your hands and make your life easier. Over 85% of Fortune 500 companies outsource their logistics needs to a third party provider (3PL). 2 Since 3PLs specialize in logistics, they are well-experienced with the industry s best practices and stay up-to-date on the latest technologies and developments. Working with a 3PL can save you time and money while you leave this part of the business to professionals you can trust. The quality of your logistics is important to the success of your company. When logistics operations are running smoothly, customer satisfaction is higher, costs are lower, and overall profitability will increase. For many retailers, outsourcing logistics has many important benefits that allow their company to focus on its core competencies and move ahead of the competition. Several key benefits of using a 3PL are: Saves You Time One of the biggest sacrifices small business owners make is their personal time. Many business owners feel that they cannot be away from their work and miss out on valuable time with friends and family. 1 Outsourcing your logistics needs to a 3PL can be a huge time-saver that takes some of the responsibility off your shoulders as well. Everyone from small, local-businesses to major corporations knows how complicated handling logistics can be. 1 Armstrong, Evan. 3PL Customers Report Identifies Service Trends, 3PL Market Segment Sizes and Growth Rates. Armstrong & Associates, Inc Jul. Accessed 5/22/15 < 2 Small Business Owners Cite Personal Challenges, Including Lack of Time for Themselves and for Family and Friends, in New Constant Contact Survey. Constant Contact May. Accessed 5/22/15. < FreightCenter How 3PLs Can Help with Small Business Growth 3

4 Instead of spending time worrying about the smaller details, business owners can hire a third-party with extensive experience in logistics to handle these tasks. Not only will this save time for the business owner, it will increase efficiency and minimize the occurrence of mistakes. 3 When it comes to storing and distributing goods, there are a number of ways in which a 3PL can help your business. For example, searching for a warehouse can be a very timeconsuming task. Once you have finally selected a suitable warehouse, the process of managing that warehouse and distributing goods is very labor intensive. Your company will need to handle everything from packaging to shipping. Instead of spending time worrying about the smaller details, business owners can hire a third-party with extensive experience in logistics to handle these tasks. Not only will this save time for the business owner, it will increase efficiency and minimize the occurrence of mistakes. 3 In turn, this will keep your customers happy and encourage return visits to your store. Saves You Money Managing expenses is a major stressor for any business owner. Any retailer who ships more than one package a day knows how expensive it can be to manage your own logistics process. This is why companies of all sizes, from local to multi-national, look to outsourcing to save money. 3 Working with a 3PL can save your company money is several different ways: They know the market place. 3PLs know how to optimize your freight network and can organize the most timely and cost-efficient flow of transportation. They can find the best rates. Since 3PLs work with several different carriers, they can leverage deals with carriers to get the best rates for their customers. Consolidate Shipments. Your 3PL can reduce transportation costs by as 35% by consolidating your shipments 4. This is especially helpful if you have a less than truckload (LTL) shipment. Your 3PL can help you identify a carrier that can combine your shipment with another company s shipment that needs to go to the same destination. Spending based on usage. Using a 3PL frees up money that would otherwise be needed to invest in warehouse space and staff. Even if you do own your own warehouse, you can still run into issues such as too much or too little space. 3 Green, Forrest B. A Practitioner s Perspective On The Role Of A Third-Party Logistics Provider. Clute Institute Jun. Accessed 5/22/15. < 4 O Reilly, Joseph. Rediscovering The Classics, Volume III: Truckload Consolidation. Inbound Logistics Jan. Accessed 5/22/15. < FreightCenter How 3PLs Can Help with Small Business Growth 4

5 Many 3PLs utilize a transportation management system (TMS) to give their customers added control over the shipping process. 5 Working with a 3PL eliminates this problem. Most providers will offer the option to flex the amount of space you use each month and adjust your fee accordingly. Not only will outsourcing your logistics give you a significant amount of savings on costs such as labor and warehouse space, it will allow you and your employees to spend more time on growing your business. 3PLs Keep You Up-to-Date with Technology Keeping up with the latest advances in logistics technology is a constant struggle for many small business owners. Choosing to work with a 3PL is a great way to ease this burden. 3PL s are highly knowledgeable about the industry s best practices and stay up to date on all the newest technologies. 3PL software is capable of handling advanced reporting, inventory maintenance, and provides visibility so the entire process can be monitored. Many 3PLs utilize a transportation management system (TMS) to give their customers added control over the shipping process. 5 A TMS is often located directly on the provider s website for convenience and includes features such as: Transit time comparisons Automatic updates to reflect latest fees and pricing Quick selection of shipment information Instant shipping status updates Online bill payment Working with a third party logistics provider can alleviate the stress of keeping up with technology. 3PLs are always improving their technologies and services to better serve the needs of your business. They can help keep you in tune with changing markets and growing demand. 5 3PL Partnership Increases Operational Flexibility, Reduces Costs WSI website. Accessed 5/22/15. < FreightCenter How 3PLs Can Help with Small Business Growth 5

6 Outsourcing 3PL services can help improve your processes and increase customer satisfaction rates so that you can relax knowing that your logistics are being handled by professionals. 3PLs must also be up-to-date with the latest security regulations such as C-TPAT, ISO, and Customs and FTC regulations. 6 It Takes Responsibility off Your Shoulders Another major issue faced my many small business owners is the need to manage so many different aspects of the business. Most owners find themselves in charge of marketing,operations, customer relations, payroll, etc. Outsourcing logistics can be a big help in dispersing some of these responsibilities and allowing you to focus on your company s core competencies. 5 Furthermore, trusting your employees to run things when you aren t there can seem like a leap-of-faith when running your own business. Working with a 3PL will give you peace of mind knowing that your logistics are being handled by professionals. In fact, a third party provider will constantly give you updates on your shipments and monitor the process to ensure that the risk of damaged or lost goods is kept to a minimum. Most logistics providers will also have sophisticated software to monitor practices and eliminate inefficiencies in the supply chain. Outsourcing 3PL services can help improve your processes and increase customer satisfaction rates so that you can relax knowing that your logistics are being handled by professionals. 3PLs must also be up-to-date with the latest security regulations such as C-TPAT, ISO, and Customs and FTC regulations. 6 A 3PL will also manage carrier contracts and insurance better than most shippers. This all means that business owners can relax knowing that that their products are being handled in the safest and most efficient way possible. 6 Customs-Trade Partnership Against Terrorism (C-TPAT) Minimum Security Criteria U.S Customs and Border Protection. Accessed 5/22/15 < > FreightCenter How 3PLs Can Help with Small Business Growth 6

7 About FreightCenter FreightCenter is a full-service 3PL whose primary focus is the development of web-based applications that assist businesses and individuals with their freight shipping needs. Since its foundation in 1998, FreightCenter has experienced a consistent growth and is now recognized as an industry leader. We currently have over one million customers and process hundreds of transactions every day. Using our web-based tools, customers can instantly compare shipping quotes from over 100 different carriers, book and track shipments, and print shipping documents online. Our primary goal is to provide each customer with personalized attention and support while continuing to develop innovative freight solutions for ecommerce and supply chains of all sizes. Conclusion Running a small business is a huge undertaking that requires lots of personal sacrifice on behalf of the small business owner. By outsourcing logistics needs to a 3PL such as FreightCenter, business owners can reduce labor and staffing costs while also saving time needed to focus on small business growth. A 3PL will also keep your company up-to-date with the latest technologies and practices so that business owners can relax, knowing that their logistics needs are being handled by professionals. FreightCenter How 3PLs Can Help with Small Business Growth 7