Saving Costs On Your Warehousing And Distribution

Warehousing, shipping , crossdocking, reworking. These are just a few examples of the services your supply chain likely requires – services that are likely better left to experts like third-party logistics (3PL) providers.  Now you may be concerned about the additional costs of using specialist providers.   As we’ll see in this article, logistics costs are not only less shocking than you may think, but they are also often outweighed by the tremendous value to your supply chain.

Seven 3PL Services To Reduce Your Logistics Costs

While there are costs involved as a 3PL handles key components of your supply chain, there are also significant cost savings. The following are 7 examples.

1. Let costs parallel revenue with shared warehousing. With the shared warehousing model, you simply pay for the space and services you use.  If volumes – and your operation’s space and service needs – are modest, then your costs will be, as well.  When your sales start booming or peak season arrives and you need more space and services, your costs will scale accordingly – but they’ll always be in proportion to your needs.

Compare this to managing your own models.  If you anticipate high sales volumes and build and staff your own large facility, but the sales aren’t there yet, then you’re stuck paying for unused space and resources.  Conversely, if you build and staff too small, you run the risk of having inadequate space and resources as your volumes take off.  Shared warehousing helps you avoid these potential cost drains by keeping your spend in line with your sales.

2. Avoid substantial WMS costs. The modern warehouse requires a warehouse management system (WMS) to manage inventory, shipments, pick and pack operations and host of other functions. While these technological wonders are indispensable, they’re not cheap. In fact, depending on the size of your operation, the cost of a fully featured system can easily reach six-figure territory. So, you could take on this expenditure yourself, or you could partner with a 3PL that already has a WMS and skip the purchase cost entirely. Most 3PLs use a fully integrated WMS/OMS with integration to all the platforms to manage all your order flow processing at the touch of a button.

3. Save time and money with rework. So many times we see  imported shipment of a products needs to be reworked and/or repackaged. You could ship it back to its origin for these services but this seriously impacts your costs, and product turn time in the process. Or you can save time and money by working with a 3PL that specialises in rework services and can perform the job quickly and cost-effectively.

4. Reduce warehousing costs with effective stock management

In order to run your business smoothly, you must have a well-functioning inventory management system. A 3PL will have a fully functional system embedded in the WMS/OMS which you will have complete access to and again only pay for what you use proportional to your stock holding and order throughput. 

Inventory management can be very convenient if you know how to do it. The well-functioning system is a process of overseeing the flow of items into and out of your stock. It’s a balance of having just enough products in the warehouse. Effective inventory management keeps the stock costs under control so you can run a successful business.

5. Reduce warehousing costs with cross docking. Many 3PLs offer cross docking services in which goods are delivered to a 3PL loading dock for temporary storage or direct transfer to another transport service. The time and costs of long-term warehousing are skipped while distribution can continue with minimal interruption. This is particularly true when considering Amazon FBA where storage costs are much higher than most 3PLs

6. Avoid the costs of doing it wrong. No matter what your industry is, your marketplace is more competitive than ever. And, whether it’s eCommerce fulfilment or retail compliance, your logistics operation is going to be a big part of your success. In other words, the stakes are simply too high to approach your logistics operations with anything less than a high level of expertise. The best 3PLs provide this and keep every component of your supply chain running optimally, efficiently, and error-free.

Turn To ATL Fulfilment To Reduce Logistics Costs

Located in Lancashire, ATL Fulfilment provides big-time capabilities from a cost-effective area of the North West. Doing business in the North West gives us cost and infrastructure advantages that allow our customers to realise significant cost savings, while also providing us with a prime location in the M6, M65 and M61 triangle that can reach