Third-party logistics (3PL) providers provide detailed logistical solutions for companies, in an array of industries, in need of contract warehousing, personalized fulfillment, and/or freight management. Often, these providers will specialize and target a specific industry or geographical market, or will limit their service offering. Those who specialize are referred to as niche 3PLs.
Q: What makes a third-party logistics provider niche?
A: Those who enter into any type of niche business tend to specialize and become very good at what they do; the same goes for 3PLs. Niche 3PLs specialize as it relates to a variety of different factors. Many focus on the service offerings they excel in; some find the geographical location that best services their customers, but the majority focus on the specific industry verticals their business processes allow them to effectively operate within. Providers who specialize recognize the value in building solutions around higher value, higher care, and a higher touch service for the commodities they handle.
Q: What are some of the advantages to using a niche 3PL over a traditional provider?
A: Niche providers typically utilize and offer:
- Existing Systems & Processes: Niche providers have a specific customer they attract based on a defined set of parameters. These parameters allow them to offer a highly specialized set of solutions due to previously developed systems and processes. The existence of these systems allows the provider to utilize them within their entire customer network, streamlining procedures at the warehouse level.
- Single Talent Pool: A niche provider typically relies on a highly trained labor pool to carry out all services for their customers. This provides the peace of mind of knowing the 3PL’s team has extensive experience carrying out solutions for like-minded product.
- Tailored Solutions: Providers who specialize typically have the ability to create and implement solutions that are specifically tailored to your business. They have the personnel in place to dedicate people to not only develop solutions for your business, but also make sure the processes are in place to efficiently accomplish the task at hand.
- Responsiveness: Existing processes and an experienced team allow a 3PL to remain nimble and responsive to both market demands and evolving customer requirements. As the logistics industry evolves and changes, so too do the industries in which 3PLs specialize. By being ‘experts’ within set verticals, they can easily incorporate new services their customers’ product requires.
Source: Inbound Logistics