The easiest explanation of 3PL logistics is an organization who works with distributors/shippers to manage their logistical operations – also known as a third party logistics. Logistics encompass components of transport management software, warehousing, in-depth reporting, freight bill auditing, forecasting, freight rate negotiations and much more. There are numerous amounts of 3PL logistics on the market all with varying models and able to perform different tasks; there will be some who specialize in certain industries such as frozen foods for example. Some may specialize in one distinct area of logistics such as warehousing, auditing freight bills or supplying logistics related software. Then there are some that do it all; a one stop shop for all logistical needs.
Improving Security with 3PL Logistics
All shipments are vulnerable to theft, whether in a warehouse, on a truck or at a port and so you need to ensure security at all times to maintain customer satisfaction and retain profits. Every year in the US there are more than $30 Billion worth of cargo lost, reaching an all time high in the year 2012. Your company cannot determine how borders or ports are secured but you can fully regulate how using 3PL logistics safeguards your products.
Once you have selected your 3PL logistics you can also supervise that security is at it’s best, at all times. An effective way to conduct this is by having GPS systems in place, within cargo, trucks and provided to those handling the products. This will also allow you to define geographical boundaries as if the GPS goes off the planned route this could indicate a problem, such as hijacking or a planned theft, and so the GPS can have a built in alarm system which will notify the relevant people if this was to happen. They can then contact the driver to find out why they have gone off route. More advanced security systems incorporated into some 3PL logistics companies are by use of state of the art, computerised technology that allow the trucks to be remotely stopped if necessary. Maybe a driver will alert you of a theft or hijack or maybe you cannot make contact with the driver and thus have concerns, with this technology you will be able to simply stop the truck from going any further and so protect all items in transit.
For all kinds of cargo, having an increased ease of communication through carriers, shippers, logistics providers and law enforcement can really enhance security. Building and maintaining good relationships with all those involved in the 3PL logistics is key – inside jobs are significantly common, the requirement for strong relationships needs to extend to employees, even those on the ground floor who have more access to your products but are so easily overlooked. By providing adequate training and reducing turnover you maintain employee moral that aids all logistics providers operations.
There are some companies who have adopted a real intense process to improve security records, involving digital technology where snapshots of your truck drivers are taken randomly and intermittently with a huge theft problem being fraudulent drivers through hijacks or inside jobs. If a shot shows a face which is not the driver then using remote technology can immediately stop the vehicle and alert the authorities – with the objective being that cargo is safe.
As well as theft being a concern, there is also the very real worry of terrorism, which can be conducted through shipments with explosives, bombs or poisonous gasses being added to cargo during the transportation chain. Recently introduced, with this in mind, is the Secure Supply Chain Pilot Programme (SSCP) that seeks to prevent tainted or misbranded items from entering the country as well as unapproved drugs found in pharmaceutical cargos. This is a scheme, which was launched in February 2014 with 3PL logistics knowing that the bar needs to be raised.
Are you thinking of hiring a 3PL Logistics company?
As a company looking to hire 3PL logistics you should be fully clued up on what security they can offer you, as above all will have different systems and provide different levels of technology. With the more advanced systems in place, the price of the company will reflect this. Those who have a distribution side to their business will know that some product loss can be expected, but if this is of a higher degree and reflecting in your profit margin they it may be wise to outsource through a higher calibre of 3PL logistics to keep losses, damages and thefts at a low number. You need to ensure that your details are also safeguarded, although your logistics company will obviously have information on your product incomes and outgoings you don’t need to reveal financial figures as you could never be fully certain these could not be leaked, which could have catastrophic effects. The North American Market Report has conducted a study, which reveals that 92% of 3PL providers felt that supplying higher IT solutions for security is the key to new growth opportunities. However, with the increase in electronic capabilities and new technologies, there comes the very real threat of your data being compromised and information loss to boot. Your 3PL providers need to have a proven track record for you to even consider them for your own business needs; thorough research is of the essence before beginning a business relationship with another party.
Your safety records need to be high, this is key for maintaining a high profit margin, which determines, significantly, how your business fares in all other areas. One way to do this, and do this well, is to hire a 3PL logistics company with the highest form of security in place, a proven history and long standing establishment. The better a company is, the higher the financial lay out will be in the beginning, but this is likely to be extremely worth it in the long run. With the amount of logistics providers in the country able to help you with your picking, packing and distribution the choice of who to go with can be tough but the absolute objective is to improve safety records for a smoother, more profitable and more protected company.