Written by: John Sell, Vice President Retail & Transportation Solutions, MD Logistics
Third party logistics (3PL) providers service various companies in an array of industries, in need of contract warehousing, personalized fulfillment, and/or freight management, by providing customized logistical solutions. Often, 3PL providers will specialize in and target a specific industry, geographical market, or service offerings. Logistics providers who specialize by industry or service are referred to as niche 3PL’s.
Companies who enter into any type of niche business tend to specialize and become very good at what they do, the same goes for 3PL providers. Niche 3PL’s specialize as it relates to a number 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 efficiently 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.
There are several advantages to using a niche logistics provider over a traditional one. Niche 3PLs typically utilize and offer the following:
Existing Systems & Processes: Niche logistics 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 3PL typically relies on a highly trained labor pool to carry out all services for their customers. This provides peace of mind, knowing the 3PL team has extensive experience carrying out solutions for like-minded product categories.
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 allows 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 the new services their customers product requires.
MD Logistics primarily operates within the life sciences and pharmaceuticals and retail and consumer goods industries. For 3PLs who operate within the life sciences and pharmaceuticals industry, there is a degree of niche specialty due to the regulatory and compliance needs the industry demands. In this instance, products typically dictate the services needed from the 3PL due to their temperature sensitive nature specific to storage and transportation environment requirements. 3PLs who operate within the retail and consumer goods industry, however, have a greater opportunity to differentiate themselves within the different services they offer to their customers, as these products typically don’t have as high of a level of specific regulatory requirements. It’s here, where the 3PL has the opportunity to develop special services to differentiate themselves from others in the industry.
Over 20 years ago, we decided that we were not going to be everything for everyone, but rather, we were going to develop a specific focus in a couple of key industries, in order to be the very best service provider for those customers. That philosophy is still at the forefront of how we conduct business, today. This ideology allows us to fully serve a specific group of customers and provide them with personalized care and direct access to our management team, working as an extension of their team. We choose our customers sometimes as much as they choose us, in order to have the best possible working relationship we can.
While we certainly identify as a niche provider, we have also aligned ourselves with strategic partners to be able to offer our customers the same services as a ‘global’ provider , in terms of transporting product around the world. A strategic partnership with SEKO Logistics, allows our customers to have access to a specialized team of freight forwarding professionals and customs brokerage agents on the ground in Indianapolis, moving product across borders and through customs as efficiently as possible. The customers who take advantage of this strategic partnership, certainly have the best of both worlds, the specialized attention of a niche 3PL and the reach of a global freight forwarder.
When evaluating your supply chain needs, be sure to consider a niche 3PL that specializes in your industry as your logistics partner. If you operate with the life science and pharmaceutical and retail and consumer goods industries, tell us about your needs. Let’s see what MD Logistics can do for you!