Does Your 3PL Have What It Takes to Support Your Company’s Future Growth?

Key Takeaways:

• 3PL providers are vital for businesses across various industries, helping them efficiently manage and scale their logistics needs.
• A crucial feature of a competent 3PL provider is its ability to scale operations and adapt flexibly to the changing demands of the business.
• Leading 3PLs leverage advanced technology, such as AI, predictive analytics, and warehouse automation, to enhance operational efficiency, improve real-time tracking, and manage resources effectively.
• Businesses should select 3PL partners based on their ability to integrate cutting-edge technology, flexibility in operations, and robust data analytics capabilities.
• Selecting the right 3PL partner is essential for businesses aiming to thrive in a dynamic market. This requires a blend of technological prowess, operational adaptability, and strategic foresight.

With all eyes on supply chains, third-party logistics (3PL) providers have emerged as indispensable allies for companies in diverse sectors, from retail and healthcare to consumer packaged goods.

The right 3PL partner not only streamlines operational logistics but also scales according to the fluctuating demands of the businesses it serves.

As your business grows and evolves, the right 3PL partner can scale and adapt with you, using technological innovation, flexible thinking, and logistical expertise to support long-term growth and ultimately provide a strong logistics foundation for years to come.

But how can you tell, for sure, that the 3PL you’re working with can actually do that?

The Need for Scalability in 3PL Partners

As your business grows, things change. The unpredictable and unexpected happen. A product surges in demand after going viral on social media, or maybe a holiday season proves to be surprisingly slow. Just as you must adapt and adjust your business processes, accordingly, so must your 3PL.

Scalability in logistics means your 3PL can manage varying scales of operations without compromising efficiency or effectiveness. For businesses, selecting a scalable 3PL partner is crucial to ensure its logistical capabilities evolve parallel to your growth and changes in market demand.

Plus, each industry presents unique challenges and scalability requirements. For example, retail faces major seasonal fluctuations, healthcare requires stringent compliance and traceability, and the food and beverage sector demands fast turnover and freshness. Tailored, scalable logistics solutions are non-negotiable when choosing a 3PL.

Can Your 3PL Handle It? Key Indicators of a Growth-Ready 3PL

A growth-oriented 3PL leverages cutting-edge technology and automation to enhance scalability. Implementations might include warehouse automation systems, AI for predictive forecasting, and robust real-time tracking solutions.

For instance, Ryder’s implementation of smart warehousing solutions in its e-commerce operations showcases how technology enables scalability, facilitates quicker throughput times, and reduces error.

• Another hallmark of a capable 3PL is its flexibility in modifying warehousing, transportation, and distribution models for seasonal peaks and growth spurts.
• Engaging with a 3PL that serves multiple industry sectors offers insights and data-driven optimization strategies across various markets.
• Data-driven logistics are crucial for scaling operations efficiently. Real-time data insights and predictive analytics enable proactive management of inventory and resources, reducing waste and optimizing delivery routes. For example, Southern Glazer's Wine & Spirits (more on them later) gained complete visibility into its supply chain for all stakeholders, using that data not only to improve distribution and refine processes but also for informed decision-making.
• Robust communication and bespoke support equals effective growth with a 3PL. Dedicated account management teams are crucial for a responsive and adaptive service environment that is not only responsive but enhances your company’s level of customer service.

The Strategic Benefits of a Scalable 3PL Partnership

You may have been fulfilling orders and shipping them yourself, but as you grow, it becomes impossible to keep up without a substantial financial investment.

Utilizing a scalable 3PL allows businesses to enjoy high levels of operational efficiency without the need for extensive investments in logistics infrastructure. This results in cost savings and allows businesses to focus resources on core business areas.

A Better Customer Experience and Faster Delivery

Anyone in business today knows the struggle of keeping up with companies like Amazon (which delivers its packages to customers in about 1.9 days on average). Fast delivery isn’t a luxury, it’s an expectation.

A capable 3PL accelerates delivery times through optimized logistical processes, which means happy customers regardless of what your business does.

Risk Mitigation and Business Continuity

A scalable, flexible 3PL can rapidly adjust to disruptions and market changes, mitigating risks associated with stock-outs, delayed deliveries, and logistics breakdowns, ensuring business continuity.

Optimized Geography

The right 3PL can open the door to opportunities to increase profitability and expand market reach. Partnering with a 3PL with a broad network of warehouses and fulfillment centers creates opportunities to sell to new markets, offer faster shipping, and decrease logistics costs.

A company that performs its own logistics suffers from high costs with cross-country orders. By working with a nationwide 3PL, products can be stored in warehouses closer to customers, reducing transit time and costs.

Real-World Examples of Scalable 3PL Success: Case Studies

Make no mistake: Innovative, flexible, and bespoke solutions differentiate a power player in the 3PL space.

Here are two examples.

How Athletic Propulsion Labs (APL) Improved Its E-commerce Fulfillment

Success in retail is defined as consistent growth. Simply stated, more orders mean more revenue, and happy customers become brand evangelists. The problem? More orders make it difficult to provide the service those customers expect. The solution? Scalable white glove fulfillment.

With the wrong 3PL partner, growth can become a struggle. As APL grew in popularity, its fulfillment provider was unable to keep pace, creating myriad problems. It was time to search for a new 3PL.

About APL Athletic Propulsion Labs was founded in 2009 by twin brothers Adam and Ryan Goldston, former collegiate athletes who wanted to bring innovative, high-performance athletic footwear to the luxury consumer.

Their patented technology and cutting-edge designs have led to a high-profile online presence and consistent presence at high-end retailers, including Nordstrom, ShopBop, and Net-A-Porter.

APL searches for scalable, white-glove fulfillment

To succeed, your brand has to stand out from the crowd, and white-glove fulfillment strategies are necessary for premium brands that want to create a premium customer experience. It takes more than fancy packaging: It takes special handling and a high-touch, enhanced level of service.

This can be a tall order for some 3PLs. APL was left in the lurch after record sales during Black Friday and Cyber Monday. Their partner informed them that they could no longer support APL’s growth.

APL knew it was time to find a 3PL that was a better short-term and long-term fit. A year-long search began.

What Ryder Brought to the Table

For APL, continually refining and upgrading its operation meant finding a 3PL partner who was proactive in looking for innovative solutions to support their customers instead of taking a ‘set and forget’ approach. APL’s goal was to work with a best-in-class partner.

A proactive 3PL serves not only as a logistics partner but also as a technology enabler, with solutions that can give technology-forward companies like APL the tools they need to keep their businesses moving.

APL especially appreciates the open communication channels and transparency they have at Ryder, which creates the perfect foundation for growth. But ultimately, the decision came down to the importance of white glove service.

As APL managing partner N.J. Falk says, “We are a luxury brand, and APL customers expect to receive a memorable brand experience. We have to be able to get up every morning with the confidence that our 3PL can deliver, and we have that with Ryder.”

Southern Glazer’s Wine & Spirits: Improving the Flow With Ryder

Southern Glazer’s Wine & Spirits is the world’s preeminent beverage alcohol distributor. They know that timely, efficient product distribution is an integral part of maintaining their industry leadership position.

Southern Glazer's is a family-owned company that distributes a wide range of wine and spirits. They represent over 1,700 suppliers and distribute more than 7,000 brands across 45 U.S. markets, Canada, and other regions. Additionally, their WEBB Banks division provides brokerage services in the Caribbean, Central, and South America.

The Problem

As the company sought to deliver products to an ever-growing global market, Southern Glazer’s encountered several challenges with its supply chain: limitations related to tracking and monitoring the movement of goods from production facilities to distribution centers, retailers, and consumers.

This lack of visibility had profound consequences, impeding the distributor’s ability to promptly address supply disruptions, which led to delivery delays that impacted customer satisfaction.

Southern Glazer’s had a 3PL they had been working with since 2015, but things were not improving. So, they turned to Ryder. The company had been leasing most of its fleet from Ryder for over 40 years. It was a natural evolution in the relationship. When they met with Ryder, they began to see the possibilities.

For Southern Glazer’s, timely fulfillment is vital. It all came down to supply chain transparency. The company wanted complete freight visibility from purchase order placement to inside the warehouse to delivery.

This included all freight, whether it was being moved by Southern Glazer’s or a third party.

The Solution

Simply put, the solution was RyderShare™, the ultimate digital product that gives all stakeholders 100% real-time visibility and collaboration on freight as it moves through the supply chain inbound, outbound, and inside the warehouse.

Through RyderShare and its dashboards, every person in the supply chain is looking at the same information simultaneously. RyderShare means Southern Glazer’s and the Ryder team can now see where orders are, the causes of delays, and when orders will arrive.

RyderShare also provides new data that the company had never accessed. This data helps plan loads and optimize movements through predictive analytics. The team can leverage accurate, timely, and complete data in everything they do and use it in key decisions.

The results:

• 100% visibility of freight moving through the supply chain.
• 50% increase in productivity.
• 98% on-time performance.
• 80% improvement in on-time pickup.
• Improved customer service with 100% data accuracy.
• 200% labor efficiency savings and decreased turnover.

Perhaps the most valued result is that Ryder comes to the table with ideas, says Southern Glazer’s, who appreciates the time the team takes to understand the needs, business requirements, context, and why.

Choosing a Future-Ready 3PL Partner

When selecting a 3PL, businesses should assess potential partners on technological advancements, flexibility, industry experience, and the robustness of their data analytics.

Watch out for these red flags: Outdated technology, rigid operational models, and poor communication are key warning signs that a 3PL will struggle to scale operations in alignment with business growth.

To maximize the benefits of a 3PL partnership, maintain open lines of communication, conduct regular performance reviews, and ensure strategic goals are aligned.

This comprehensive understanding of the strategic role of 3PL providers helps businesses make informed choices for a logistics partnership that not only meets but anticipates their evolving needs.

Ryder: Your 3PL Partner Today and Tomorrow

The exponential growth of various industries today necessitates a strategic partnership with A 3PL that is not only capable of scaling but also adept at adapting its operations dynamically to suit the changing demands.

A scalable 3PL partner epitomizes flexibility, technological innovation, and operational excellence, providing companies with the competitive edge needed in a rapidly evolving market landscape.

Ryder has the most comprehensive, end-to-end supply chain solutions, customized to your needs today and as your business grows. We have the technology and expertise to allow you to reach new heights for both your brand and revenue.