Why “Hire” a Logistics Services Provider (aka: 3PL, 4PL, 5PL, ultimately a “Supply Network Services” company)?

I don’t like the term “hire”, though it will certainly be a contractual relationship.  I prefer for it to be considered a partnership, teaming, even extended family (we’re friendly people).  Ultimately, we’re an extension of your company and can often be the face of your company from a customer service, delivery, and packaging perspective.

First and foremost, you want a partner that operates with the utmost integrity, is trustworthy, honest, and collaborative.  You want a partner with real-world experience combined with deep expertise.  You want a partner that continually strives for excellence. 

With that foundation set, let’s get into the weeds a bit.  I’m a list maker.  I like lists.  They keep me focused, help with prioritization and organization.  That said, regarding the question “Why Hire a Logistics Services Provider (3PL/4PL)?”, I’ll to answer with a list… several lists actually. 

The Bottom Line is Money – Reduce Your Costs & Increase Your Revenue

Starting and operating a logistics organization is very costly.  Let’s break it down so you have an idea of what to expect. 

First, you save on Capital Investments.  You forgo having to spend on:

  • Space (leases or ownership of brick & mortar)
  • Space designs and engineering
  • Software systems
  • IT Systems Hardware (servers, RF / wireless devices, GPS devices, scales, PC’s, peripherals, wedge devices, etc.)
  • Equipment (MHE [1] racking, shelving, trucks etc.)
  • Dock doors, levelers, and dock locks
  • Conveyors
  • Stretch-wrap, shrink-wrap, banding, packaging, and labeling equipment
  • Compactors and balers
  • Scales and measurement devises / systems
  • Automated Storage & Retrieval Systems
  • Security systems

[1] MHE (Material Handling Equipment): examples of MHE are Forklifts, Manlifts, Turret Trucks, Order Pickers, Cranes, Scissor Lifts, Carts, Tugs, Hand Trucks, Pallet Jacks, Walkie Stackers, Walkie Riders, Platform Trucks, Side-Loaders, Guided Vehicles, Elevators, Yard Jockeys, and the related chargers and fuel sources (gasoline, propane, diesel). 

Second, you save on continual operational expenses.  You don’t need to plan for:

  • Labor, management, and the related burdened expenses
  • Multi-shift operations
  • Space and facility maintenance
  • Material handling equipment maintenance
  • Dock doors, levelers, and dock lock maintenance
  • Maintenance for conveyors, wrapping, packaging, compacting, banding, baling, and labeling equipment
  • Vehicle registration, operation, fuel, and maintenance
  • Calibration of scales and measurement devices
  • Janitorial services
  • Yard maintenance

Third, you reduce the number of obligations you may have to report which may impact your credit rating and require UCC filings.  Some of these are Notes Payable, Loans, Leases, various financing methods for assets such as:

  • Facilities
  • Racking, shelving, furniture and fixtures
  • Facility improvements and fit-out
  • Material Handling Equipment
  • Vehicles
  • IT hardware
  • Software systems
  • Refrigeration and or freezer equipment
  • HVAC equipment
  • Backup power generation equipment

I’m sure we could add many more items to each list.  But it’s a good start for your consideration.

You can even increase your revenue.  How?  By selling our capabilities as complimentary to yours. 

  • Our people
  • Our systems and portal
  • Our logistics networks
  • Our agility, adaptability, scalability, flexibility, and operating speed

It is my experience that our customers save significantly using a logistics services provider.  Cost savings and deferred costs / expenses result in significant favorable results on your bottom line.  There are many studies available to support this claim.

Expertise & Experience

People – We are logisticians, it what we do.  We have experience, education, specialized training, and certifications. 

Processes – We have tight well-honed processes and procedures.  They are infused with structure, discipline, and a strict focus on compliance.  These processes are complicated.  Consider the following operations we perform:

  • Network analysis
  • Inbound transportation management, coordination, and control
  • Receiving and incoming inspection
  • Put-away, storage, slotting, profiling
  • Inventory control, rotation, management, and accuracy
  • Kitting, assembly, and some manufacturing activities (e.g., private labeling)
  • Pick, pack (simple and specialized) and shipping operations
  • Outbound transportation management, coordination, and control
  • Mil-Spec processes for packaging, labeling shipping, bar-coding, RFID Encoding, DCMA audits / inspections, etc.
  • The handling of return goods.  The various issues, from inspections to reprocessing to repackaging, to recycling to disposal    
  • Scale and adjust for seasonality
  • Circular logistics, a fully “green” solution.  Single swaps, double-swaps, recycling… just the systems to manage this could require an entire team.
  • Cold-chain solutions with temperature controls, systems, and monitoring.  Gel-packs, dry-ice, refer / freezer trucks, etc.  
  • Lot number, batch number, serial number, expiration dating, production date, cure date, re-test date, etc.  The management of these to affect the proper picking and distribution strategies is not simple.  Full chain-of-custody information can be a requirement.  On top of that, there is the ability to provide information for potential recalls. 
  • Decontamination and / or de-badging of return goods and equipment
  • Disposal and recycling in accordance with the many regulations

Holistically, we provide the improved efficiencies and productivity we’ve worked for years to attain.  You get that benefit on day one.

Systems: Think about the systems required.  The software, hardware, management, and use of: 

  • WMS – Warehouse Management Systems
  • EDI – Electronic Data Interchange across customers, carriers, ERP systems, portals, dashboards, etc.
  • TMS – Transportation Management Systems which can include management and monitoring of our own fleet of vehicles, carrier networks, parcel shippers (UPS, DHL, FedEx, USPS, Estafeta, etc.), “live” LTL, FTL and Parcel rate shopping systems, etc.
  • Automation – Integration with Automated Storage and Retrieval Systems (ASRS), Material Handling Equipment (MHE), scales, labelers, temperature sensors, humidity sensors, video inspection systems, security systems, etc.

Network – You benefit not only from our experience and expertise, but you also get access to our extensive network of suppliers, carriers, brokers, forwarders, systems experts, regulatory experts, and our “contact list” of friends and peers in the industry.  Further, we pass on to you many of the discounts we have negotiated from these suppliers based on the combined value of all our volume.   This is a HUGE advantage.

That’s just a subset. 

Simple logic says, when you require professional advice or counsel, you seek an expert.  We are subject matter experts in the field of logistics.  Our purpose is to share our expertise with you.  The requirements can be mind-boggling.  Not for us, we live this every day.  This IS our core competency. 

Focus on your core business

Logistics and Supply Chain Network activities is our core competency.  Focus your time, money, people, resources, and attention on your core business… your area of expertise.   Why create an entire organization to manage something that is not your core competency to dilute and distract your team?  To sap time, money, and other resources from your core area of investment?

Let an expert handle this.  We’ll do our very best make it easy for you.

Compliance / Regulatory

Logistics and Supply Chain activities are quite complex.  In addition to the actual systems and process mentioned above, logistics activities are highly regulated.  Expertise is required in several areas.  Examples include:

  • ISO – International Standards Organization
  • DCMA / Mil-Specs – Defense Contract Management Agency
  • FDA QSR’s – Food & Drug Administration Quality System Regulations
  • USDA – United States Department of Agriculture
  • GTC Regs – Global Trade Compliance
  • DoT / DoC / IATA – Department of Transportation, Department of Commerce, International Air Transport Association
  • Hazardous / Dangerous Goods

That’s an incomplete list, there are several more.  Many of the above are regularly audited, in-person.  Are you prepared to meet these regulatory and compliance requirements? 

The Greatest Asset – Time!

Working with a logistics services provider saves you time… and its compounding.  Not only does it save you time and your business time, but it also saves every one of your employees’ time… time that if combined would total many years!  What is the cost?  How do you value this?  What other activities could they be doing to grow your business?

As you think through the requirements, consider activities such as: Planning, Recruiting, Hiring, Training, Design, Systems implementations and integrations, Start-up, Execution, Ongoing Operations, Continuous Improvement to name just some. 

At Spearpoint, we onboarded our last large customer in three weeks.  Up and operational in THREE WEEKS! 

In his essay, “Advice to a Young Tradesman“, Benjamin Franklin said “Remember that time is money.”  This is not just an aphorism; it is 100% true.

Taking it further, saving time is a competitive weapon.   Let Spearpoint Logistics save you time, save you money and make you more competitive.

Finally….

I’ve answered the question “Why Hire a Logistics Services Provider?”, and the answer is obvious.  Perhaps a better question now is: “What would it cost, and how much time will it take for you to do all of the above to start or operate your own Logistics operation?” 

As you model the various options, tweaking the variables and performing sensitivity analyses, you will most likely find that you will save far more by working with a Logistics Services provider. 

Further, you won’t have the uphill “start-up / learning curve” battle to fight.  Your Logistics provider already has refined processes, honed and continuously being improved, and a well-trained team with seasoned leaders.

We will work with you and your customers to develop the best solution for your business, to meet your goals and objectives, ultimately giving you peace of mind.

Two final notes. 

(1) Spearpoint Logistics is an SDVOSB – Service-Disabled Veteran-Owned Small Business.

(2) By working with Spearpoint Logistics you will have access to our eCommerce platform for discounted MRO, Industrial, Commercial, Electrical, Jan/San, PPE/Safety supplies and much more.  Over 2,000,000 SKU’s available to purchase and more than 500,000 SKU’s on-hand; available for next day delivery with parcel freight charges waived. 

Please reach-out for more information.

At Spearpoint Logistics we “Get Ship Done!”

We help you navigate the entire supply chain. Our job is to overcome challenges and maintain agility and flexibility to meet rising consumer demands.

Let us focus on your logistics needs so you can focus on your business.

Spearpoint Logistics is a VA Certified SDVOSB (Service-Disabled Veteran-Owned Small Business).


[1] MHE (Material Handling Equipment): examples of MHE are Forklifts, Manlifts, Turret Trucks, Order Pickers, Cranes, Scissor Lifts, Carts, Tugs, Hand Trucks, Pallet Jacks, Walkie Stackers, Walkie Riders, Platform Trucks, Side-Loaders, Guided Vehicles, Elevators, Yard Jockeys, and the related chargers and fuel sources (gasoline, propane, diesel). 

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