Growth of Third Party Logistics Companies In India

A majority of businesses depend on their supply chain management (SCM) to implement cost-effective and timely deliverables. While an effective SCM is a solution, most businesses are not able to dedicate their resources or manpower to do so, which invariably affects their business. 

Third-party logistics (3PL) refers to outsourcing logistics processes including inventory management, warehousing and fulfillment.  The expansion of e-commerce, manufacturing, FMCG and retail has estimated a growth rate of over 11.5% during the forecast period of 2020-2025 for 3PL logistics companies in India.

Importance of 3PL Logistics in SCM

An efficient SCM enables a business to maximise customer value and achieve a competitive advantage over its competitors. By collaborating with 3PL logistic companies, a business can take advantage of its expertise and technology to identify loopholes and effectively create an efficient SCM. Safexpress, a 3PL and inventory management provider, helps in meeting their clients’ needs to the fullest with the usage of technology and strict adherence to standards. 

Safexpress 3PL services include warehousing solutions which provide services to identify strategic warehouse locations, design rack layout and required stocking levels. It also involves monitoring and controlling all critical warehouse processes. Safexpress’s warehouse management system are able to integrate with the existing ERP system of clients thus helping to maintain data integrity.

Advantages of Using a 3PL Logistic Company

A business using 3PLs can utilise the most cost-effective services that may include return processing services as well. A 3PL logistic company’s services can be tailored to meet individual business requirements including inventory management to last-mile delivery services.

· Less Overhead Costs with Increased Resources

A 3PL logistic company can provide an extensive logistic network as compared to the existing network of business. Since they specialise in logistics and usually have tie-ups with other service providers, they are in a better position to negotiate and finalise better pricing for a business. 

With the help of 3PL logistics, businesses can avoid infrastructure investments such as additional fleets, warehouse space, manpower and investment in tracking technology.

· Reach Out to a Larger Market

A 3PL logistics company can provide business access to national and international markets, and help businesses to establish their brand presence. With the help of a 3PL logistic company’s resources such as warehouse, manpower and distribution centres, businesses can venture into new markets without incurring additional infrastructure costs. A larger customer base can be catered to with the help of a 3PL logistic company.

· Availability of Resources to Focus on Core Competencies

By outsourcing services to a 3PL logistic company, resources such as time, money and most importantly people can be utilised for the business’s core competencies.  The hassle of warehouse management, transportation, paperwork, customs and billing would be handled by the 3PL logistic company.

· Access to 3PL Expertise and Experience

A 3PL logistic company’s offering to businesses includes best rates, knowledge in matters such as transport documentation, import and export, international compliance and economic regulations, thus making their expansion journey to new markets a smooth process. 

With a 3PL logistic company in-charge of logistic activities, order fulfillment and returns can be done in a fast and cost-effective manner, ensuring customer satisfaction and brand loyalty.  

Conclusion

Third-party logistics companies in India help in providing cost-effective logistic services to businesses who wish to outsource their 3PL activities such as inventory management, warehouse management and delivery fulfillment. 

With the Indian government implementing reforms in the transportation industry to reduce logistics costs from 14% to 9%, 3PL logistic companies in India have great growth potential.

Source:- https://www.reddit.com/user/safexpress1/comments/mb6tut/growth_of_third_party_logistics_companies_in_india/