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The pandemic seems to be a wake-up call for many businesses. For the longest time, companies prefer to have an in-house team, to keep their supply chain moving. However, in the past three years, we saw a massive shift from obsessing over bringing in a logistics specialist to outsourcing logistics capabilities to 3PL providers.
What is logistics outsourcing to third party logistics?
Outsourcing logistics is when companies utilize an external logistics service provider (third-party logistics) to satisfy any supply chain and logistics services needs.
Pretty straightforward.
Why are companies outsourcing logistics now more than ever?
According to this article from SupplyChain, an interview with PwC’s Miles Lethbridge and Tom Woodham, this is why:
General reasons are unchanged. Companies are looking to 3PL partners to alleviate their logistics pressure because these companies are not experts.
Covid-19 has put immense pressure on companies, and outsourcing logistics services became the only logical solution to satisfy general supply chain needs and cost reduction: order fulfillment, general logistics operations, inventory management, etc.
The pandemic-caused labor shortage meant the company could not sustainably maintain an in-house logistics team. Logistics providers can share their teams across operations. Logistics outsourcing has become more sustainable.
3PLs are held to enable better risk-management systems
Not only are companies tapping into logistics providers' expertise, but they are also accessing the 3PL network and many other capabilities that were not before accessible.
Risk mitigation
Different logistics services for different supply chain needs
While there are a few reasons a business WOULD NOT utilize logistics outsourcing, such as logistics being the core part of the company instead of a branch, it is still a common practice to outsource "non-core areas".
Undoubtedly, it has been a stressful few year. Many businesses realize the best and most sustainable practices for themselves, and VICO Logistics loves seeing this growth and improvement.
As a third-party logistics provider, VICO Logistics takes care of every aspect of logistics needed for your business to run smoothly. Our service is to add value and minimize wasted time. By outsourcing to us, you are investing more time back into the core capabilities of your business, maximizing growth effort.
VICO Logistics would love to help you figure out ways to minimize stress. Please send us a message or email us to schedule a free consultation call.
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