The more complex a company’s transportation network is, the less effective it can become.
Many shippers turn to a broad base of 3PL providers as a solution, but this can result in poor communication, disorganized data, and increased costs. When capacity is an issue, you may decide to reach out to a broad network of brokers to quote your load in hopes that they all have access to different resources. But many brokers have the same resources and this can just create artificial demand. While using many freight brokers may seem like a way to keep rates low, this disorganized approach could be costing shippers in the long run.
Using a lot of different partners can often mean a lot of different systems. Spreading your data across multiple systems inhibits your holistic view of your transportation spend, trends, and opportunities. Without a clear view of all of your data, it becomes impossible to see all the opportunities to match inbound and outbound freight. Missed opportunities means you are spending more time and money than needed. Coordination between multiple 3PLs can be time consuming and often doesn’t garner the results desired. There are ways to aggregate data from multiple brokers, but this can take a lot of time and manpower to implement.
What are the potential benefits of consolidating 3PLs?
Who doesn’t want lower costs, higher transparency, and better visibility and communication? By simplifying your trusted partner line-up, the increased visibility to what is happening with your loads can ultimately generate a more efficient supply chain. Careful evaluation of each 3PL should focus on what value and special services they can provide, not only on price. While price is important, if you are only evaluating the lowest-priced companies, you could likely get poor service full of mistakes. These mistakes can be much more costly to your company in the long run as well as causing you a considerable amount of unnecessary stress. You need partners who are competitive but also trustworthy and able to handle any issues that may arise.
Each company is unique, but sometimes consolidation of 3PL providers can prove itself to be the best strategy. Sometimes an interconnected network of brokers will work just as well. Either way, if you can end up with greater visibility into your business and more savings opportunities, it may be worth the culling process. Matching the best teams and technology with your company doesn’t have to be a cumbersome process.