A Cleveland 3PL Helps Partner Companies Navigate Ongoing Supply Chain Challenges
The modern supply chain is capable of impressive feats, delivering goods and materials from across the globe to businesses, suppliers, and customers in days or sometimes even hours. Of course, there are always vulnerabilities. If the last 1.5 years has taught us anything, it’s that even the most tightly-managed supply chains aren’t invincible. Industry analysts now opine that global supply chains are poised for ongoing, high volatility on several fronts. Those partnering with a Cleveland 3PL will find they’re far better prepared to successfully steer through these challenges.
You may recall that during the pandemic, supply chain snags meant certain goods and products were unavailable for days, weeks, and even months. High-demand items were suddenly in short supply, creating logistical calamities that have, in some cases, persisted to this day.
These problems haven’t been limited to a single industry or product, which is why we’ve seen overall hikes in logistics costs. Compounding matters are the record numbers of ships delayed at ports, a highly constrained warehousing space market, and soaring fuel costs. According to the U.S. Department of Energy, the cost of fuel was up more than 35 percent this summer year-over-year. In some areas, load-to-truck costs are up more than 70 percent.
As longtime Cleveland 3PL providers in warehousing and shipping, we’re familiar with the many ups and downs (and sideways spins) a supply chain can take. Given that there is a good chance we won’t see a pre-pandemic normal of supply chains anytime soon, businesses need to brace themselves for disruptions and higher costs. Those that are working with a dedicated third-party logistics firm will have a leg-up on the competition.
Why Supply Chain Challenges Remain on the Horizon
At the most basic level, a supply chain links raw materials with the end user – sometimes with hundreds of suppliers, manufacturers, warehouses, stores, and consumers tied directly or indirectly. Companies do their best to plan their production and storage on the basis of anticipated demand, timing of demand, production time leads, transport times, customs processing times, available warehousing, and shipping times. But of course, it’s always been true that this leaves a lot of room for unpredictability.
Some of what industry insiders expect over the next several seasons:
- Industrial real estate prices continuing to soar. Lumber, steel, and other construction supplies have been tough to come by, even as demand has been on the uptick. Industrial distribution space is at a premium, but completion on new warehousing and distribution centers has stalled because builders can’t secure all the necessary materials. This has driven up commercial real estate costs, as well as impacted numerous supply chains.
- Requiring more minimum value orders for free or low-cost shipping. Lots of outlets have offered direct-to-consumer shipping for years, but it really took off during the pandemic. Retailers are setting minimum order values to offset their warehouse picking and delivery costs.
- Companies scaling back on variety, volume – or raising prices. For as long as the chain of supplies remains volatile, we may see businesses choosing to offer fewer selections, less volume, or the same items at higher prices. This is especially true as we approach the holiday season, given the backlog of containers we’re seeing at major ports.
While many supply chains are clearly strained, it’s worth noting that there is always some degree of volatility in national or international markets. Cleveland 3PL providers know this, and are experts in preparation and contingency planning. Working with a third-party logistics outfit that already has ample warehousing resources, the latest tracking technology, and a first-rate fleet can significantly drive down your costs in the long-term.
Cost-Cutting Advantages of Working With a Cleveland 3PL
There are many ways that working with a Cleveland 3PL can boost your bottom line. Among those:
- Expertise and up-to-the-minute insight. Many company leaders are somewhat surprised to learn that seemingly simple supply chains can be complex when you factor in shipping, fulfillment, and warehousing. A 3PL is going to bring years of experience, industry connections, and customer support to the table – all of which can help you streamline processes. This is especially true if you’re dealing with the complication of international shipping (customs, duties, documentation, bill of lading, shipping regulations, etc.). When you work with a 3PL, you’re allowing people who know what they’re doing to assure you’re in compliance with all the necessary protocols.
- Reduced labor costs. One of the most costly elements of warehousing and shipping is labor. When you’re working with a 3PL, you have someone else overseeing labor intensive processes, which means your firm is able to focus on its core competencies.
- Avoiding expensive missteps. Because third-party logistics organizations are in the business of organizing and managing supply chains, we’re better at identifying potential pitfalls and risky moves that could cost you in the long-run. This kind of forecasting allows companies to minimize waste and maintain more optimal inventory levels.
- Flexibility and scalability. Partnering with a Cleveland 3PL gives many firms the ability to scale their space, labor, and transportation output as needed. If you’re renting your own warehousing space or arranging your own shipping, you may not have as much flexibility when sales surge or slow from month-to-month. With a 3PL, you can.
With so much supply chain uncertainty on the horizon, many companies are increasing turning to dedicated 3PLs to help ensure they have the tools and technology necessary to eliminate inefficiencies, make adjustments, rise to the challenges, and continue to meet customer expectations.
Contact On Time Delivery & Warehouse by calling (440) 826-4630 or send us an email.
5 years of supply chain disruptions and the lessons learned, Sept. 21, 2021, By Edwin Lopez, Supply Chain Dive
More Blog Entries:
How a 3PL Can Help Reduce Your Cleveland Warehousing Costs, June 30, 2021, Cleveland 3PL Warehousing Logistics Blog