May 09, 2019
Third party logistics, also known as 3PL or TPL, has exploded in popularity amongst Australian businesses, particularly those operating in the retail industry. As retail competition continues to increase, online ordering becomes the preferred way to shop, and consumer demand for fast and cheap delivery grows, more and more Australian retail businesses are turning to third party logistics to maximise efficiency and improve profitability. Third party logistics allows businesses to outsource part or all of their business’ fulfillment, warehousing and distribution services on a contractual basis. This means that supply and distribution services are only used when they’re needed, which helps to control costs and enables businesses to focus their time and resources on their core competencies.
Third party logistics companies often provide a variety of warehouse, fulfillment and distribution services, such as:
- Analysis of business structure and supply chain
- Domestic and/or international logistics
- Reverse logistics (handling returns)
- Storage facilities
- Picking and packing
- Kitting of goods
- Inventory control and management
- Shipment preparation
- Shipping strategy and planning
- Fleet management
- Freight tracking
- Freight cost analysis
- Stock quality control checks
3PL companies often tailor the services they provide based on the structure and needs of a specific business. By customising the services that the 3PL company offers, it enables the retailer to better serve their customers, and maximise efficiency and outputs, whilst driving down costs.
3PL and Retail
Australia’s retail industry is a highly saturated competitive landscape with over 75,000 businesses in operation. In addition to the volume of businesses in this sector, changing customer expectations is also compounding the competitiveness of retail. Customers want their orders and they want them now, especially at the lowest price possible. Thanks to the internet, consumers are more empowered than ever. So, if a retailer is unable to meet these expectations, they will have no hesitation in looking elsewhere. It is clear that in order to not only survive, but thrive in the retail sphere, retailers must fine-tune their supply chain and logistics to gain a competitive advantage.
Benefits of 3PL for Small to Medium-sized Enterprises (SMEs)
Although it may seem as though the services of third party logistics companies are reserved for major corporations, small to medium-sized enterprises are recognising the benefits of 3PL for their uniques business structures.
Cut Costs & Scale Business
Employing the services of a third party logistics business is particularly beneficial for small and medium-sized enterprises as it enables them to scale their business according to market demand. This is because the warehouse, fulfillment and distribution services that 3PL companies provide are only employed as they are needed, which helps to keep costs down. Also, transitioning between market highs and lows is typically easier for SMEs partnered with a 3PL, as they are supported with the necessary labour and resources required during heightened demand, whilst maintaining the ability to scale back during slower periods. In addition to this, partnering with a 3PL company is beneficial for SMEs as it enables them to expand into new regions with minimal barriers. This is because as the SME grows, the 3PL company has the resources and capabilities to help them reach all their customers in new locations.
Focus on Core Functions
Outsourcing to third party logistics also enables SMEs to focus on their core competencies. For example, instead of a cosmetics retailer worrying about how they will go about fulfilling and shipping a sudden influx of orders, they can allocate those valuable business resources towards launching new products that will help grow their customer base. This is extremely beneficial in Australia’s highly competitive retail space, as it allows the SME to pour more time, money and energy into vital business functions that improve profitability and ensure longevity.
Access To An Extensive Resources Network & Supply Chain Expertise The main benefit of a SME employing the services of a 3PL company, is that it gives them access to the 3PL’s supply chain expertise and invaluable logistics resources. For most SMEs, this wealth of logistics knowledge, technology, and equipment would have been unavailable in-house, or too costly and time-consuming to develop. With a 3PL handling their warehousing, fulfilment, supply chain and logistics needs, SMEs can rest-assured knowing that they are in the hands of dependable and experienced professionals.
At Workfast Labour Hire, we are the experts in providing labour hire staff for warehousing, manufacturing and distribution companies. We have an extensive database of labour hire workers that possess a variety of skills and experiences you may require. So, whatever labour hire staff you need and wherever you need them, we can help you out. Workfast Labour Hire allows you to scale your team up or down depending on the needs of your warehousing, manufacturing and/or distribution company, to help you get the job done on time and on budget. To get started with us and quickly connect with high quality and fully-vetted labour hire workers, call Workfast Labour Hire on 1300 824 403 or complete our online Labour Hire Staff Request Form today!