In recent months, logistics industry watchers have seen demand for warehousing close to major ports surge, driven by the tsunami of e-commerce demand and flood of container imports. That’s made it tougher – and more expensive – to find storage space from New York to Los Angeles. Bloomberg reports these demands are unlikely to abate anytime before next year, at the earliest. The good news is many companies may find solutions in working with Ohio warehousing & distribution firms that are strategically located and connected.
Both logistics service providers and real estate companies were quoted by The Wall Street Journal as saying the fierce competition for warehousing space near port cities has pushed warehouse costs so high that many companies have been compelled to scour neighboring regions (including in the Midwest) to serve shippers’ needs. Northeast Ohio has long been a prime, strategic hub for warehousing and distribution.
The demand for industrial space – inland and around the ports – is likely only to rise in the coming years. Nationally, it’s accelerated the last few years thanks to the rapid rise of e-commerce, which relies more heavily on Ohio warehousing and distribution versus retail space. Storage space rates in some regions have doubled just in the last year. The pandemic exacerbated that trend, and shows no signs of abating.
If your current, in-house Ohio warehousing and distribution practices are already taxing your time and resources, it may be time to take another look at outsourcing with a Cleveland 3PL. “3PL” stands for “third party logistics.” A dedicated 3PL warehousing provider does more than simply give you a place to store your stuff. It offers opportunity for dynamic companies to access a broad range of supply chain & logistics services and expertise.
Supply chain optimization is all about getting customers what they want, when they want it and spending the least of money possible to do so. However, if your inventory is inaccurate, there will come a time that a warehouse worker will go to pick a SKU for an order, and it won’t be there – or there won’t be enough. Working with a dedicated Cleveland 3PL helps ensure that you aren’t losing time and money to avoidable inventory inaccuracies.
Third party logistics providers (3PLs) like On Time Delivery & Warehouse continually evolve their service offerings, not only to set ourselves apart in the marketplace, but also to meet increasingly rigorous customer demands. 3PL operator customers trust us to manage numerous functions, including warehousing, trucking and overall supply chain optimization and management.
As noted by research published in the International Journal of Recent Research in Commerce Economics and Management, outsourcing inventory management allows a company to:
- Maintain their focus on core competencies.
- Broaden competitive advantages.
- Enhance differentiation in the marketplace.
- Avoid outlying, resource-intensive tasks.
- Reduce logistics and carrying costs.
Working with a Cleveland 3PL provider that can capably manage inventory means entrusting the company’s most valuable assets to a third party. But this also assures peace of mind. They likely recognize that poor inventory management is the root of many operational problems, missed sales, lost time to perform reconciliation and shrinkage. That means it must be given high priority. Doing so, however, is a significant challenge, particularly when the company is responsible for maintaining numerous items of inventory for multiple clients in the same place. A third-party logistics provider already has the resources and experience with best practices.
Some of the factors that result in inventory inaccuracy include:
- Poor store records or documentation.
- Manual documentation and records posting, leading to long processing times and increased odds of misplacing figures or making a recording mistake.
- Keeping inventory in the wrong place.
- Errors in inventory transaction.
- Physical inventory is either stolen, damaged, expired or spoiled.
Paint. Dry ice. Lithium batteries. Perfume. There are just a few of the seemingly innocuous items that are considered potentially hazardous when they’re in transit. If you sell these or other regulated hazmat goods, there are tight regulations for transporting them. As our Ohio hazmat certified shipping providers can explain, the U.S. Department of Transportation mandates that anyone shipping hazardous materials be both trained and certified. Proper shipping of hazmat materials means correctly packaging, labeling and documenting all items as well. Non-compliance can result in costly legal action – both from government fines and civil liability for injuries. The skillful handling of your hazardous materials is essential for the safety of everyone in the supply chain.
At On Time Delivery & Warehouse, our Ohio hazmat certified shipping teams are experienced in packing, crating and securing these materials to minimize potential risks – from pickup to delivery and every point in between.
Winter weather can make even the most trivial tasks exponentially more difficult. As recent events have proven, this is especially true when power lines (or entire power grids) are down, rail services have ground to a halt, natural gas is in short supply, hundreds of flights are canceled and icy roads are exceedingly perilous. All of this will have a snowball effect on your supply chain. While there’s no way to control the weather, working with a Cleveland 3PL can help you better insulate your supply chain for the inevitable moments when you won’t have control.
As in sports, the best defense is a good offense when it comes to supply chains. Ideally, you will have planned and prepared for supply chain setbacks. As a longtime Cleveland 3PL, we have trucking, warehousing and shipping partners all over the country, allowing you to navigate more nimbly through some of the most serious seasonal swings and challenges.
In third-party logistics, our success depends on your success. We’ll only recommend actions that are in your best interest. Some of the top ways you may benefit from a 3PL partnership in advance of a weather crisis:
As a long-time 3PL firm and provider of Cleveland last-mile delivery services, we understand the important role logistics plays in getting products where they need to go – intact and on time. When logistics aren’t effectively coordinated, communication and visibility suffer and bottlenecks and delays become inevitable. This was illustrated recently in early efforts to distribute newly-available COVID-19 vaccines.
We should start by saying this was never going to be a perfect process because of the scale, limited supply, outsized demand and sheer number of stakeholders. But it was largely presumed the rollout wouldn’t be overly-taxing on U.S. transportation capacity. So why the many roadblocks? And what can businesses learn from it?
It’s possible supply chain inefficiencies in some states could be partially addressed with expanded trucking capacity. But complex storage, handling and administration requirements were an undeniable part of the equation. Beyond that though, it does seem the trouble broadly has been less in getting available vaccines from manufacturers to the states and more with logistical struggles in facilitating last-mile deliveries.
This is unsurprising because, as any 3PL service provider knows, last-mile deliveries are often the trickiest. This is true whether we’re talking about airplane parts or toilet paper or medicine. It didn’t help that this was essentially a massive, brand new supply chain with untested routes and logistics coordination.
The takeaway for businesses is that no matter what your industry, it’s imperative that your Cleveland last-mile delivery 3PL service be one with extensive experience, established routes, top-tier technology and trusted supply chain partners.
However one feels about the politics of it, the ongoing trade war between the U.S. and China has invariably imposed significant burdens on stateside supply chains. Cleveland third-party logistics firms do our best to help insulate our clients from the economic impact – which for now shows little sign of abating – or at least find ways to help offset the costs.
The trade war began nearly one year ago with President Donald Trump imposing tariffs on $250 billion Chinese exports. Administration officials cited China’s alleged theft of U.S. intellectual property (mostly in the tech sector), as the primary catalyst, but also noted a desire to incentivize American companies to bring manufacturing jobs back to the U.S.
The Chinese government retaliated by increasing taxes on American exports and decreasing taxes on most every other country.
This escalation has dragged on for months, with a 15 percent tariff on another $112 billion worth of Chinese goods going into effect early next month, bringing two-thirds of goods imported by the U.S. from China under additional taxation. Another 15 percent tariff on $160 billion in goods is slated to go into effect in December. If that happens, almost all Chinese imports will be under tariff.
Sharply divided are conclusions about whether this will be effective in bringing back U.S. manufacturing jobs or curbing intellectual property theft. What we do know for certain is that companies in Ohio can’t bank on this simply blowing over. The stakes are too high. They must prepare.
Dialing in business growth solutions in Northeast Ohio rarely involves a single factor, but the strength of a company’s Cleveland supply chain strategies can’t be overlooked.
Simply put, the supply chain is the flow of goods and services both within and among companies, domestically and internationally. It usually begins with raw materials and manufacturing, then onto production, processing and packaging and then transport and distribution – though your firm may only deal directly with one or two aspects. What is often not so simple – especially when that chain crosses state and international borders – is the logistics.
Ensuring goods get from Point A to Point B intact and on time is the foundation of our entire business model. Logistics management is a $1 trillion dollar industry in the U.S. – and it’s still growing, thanks to e-commerce and advancing technology.
Ohio University analysis shows that in just in the last decade, supply chain management employment has spiked by more than 50 percent – and that’s because business leaders increasingly recognize the upper hand it affords. The Cleveland and Columbus regions are especially active hubs, thanks to their central physical location, population and industry density and access to various transportation modes.
Whether on a highway, an ocean freight or a customer’s doorstep, one key advantage of working with a Cleveland 3PL (third-party logistics company) is reducing the risk of liability – on several fronts.
How? A dependable Cleveland 3PL streamlines supply chains by reducing bottlenecks, constantly updating intermodal deliveries and preparing for exigencies with solid contingency plans. In taking on these responsibilities, our insurance assumes coverage for some of the risks our clients would otherwise have to burden alone.
That said, shippers/manufacturers are urged to carefully review their own liability insurance plans with a qualified agent to ensure their coverage is sufficient, but not excessive. Cargo insurance (land, marine, general) is not required of shippers, but it’s something for which many opt.
Although we can’t advise you on insurance, here’s what we can say:
At On Time Delivery and Warehouse, our committed Cleveland 3PL team strives daily to always provide the very best logistics services to our clients while also keeping our rates AND terms-of-service, fair, unambiguous and transparent.
Ballooning e-commerce in nearly every industry has rendered Cleveland warehouse space in short supply. Faced with increasing consumer demands and fewer options, more Northeast Ohio businesses are opting to outsource Cleveland warehousing and distribution operations rather than keep them in-house.
Companies with seasonal, fluctuating or uncertain profit margins or those planning on a substantial expansion or contraction generally conclude it makes little sense to keep these resource-heavy duties in-house when those who outsource Cleveland warehousing to a third-party logistics firm are gleaning more benefits with less cost/hassle. Those who manage their own warehousing will be dealing with increasingly stiff competition from those who outsource. In addition to fewer choices and soaring e-commerce, there are sky-high transportation expenses, evolving technology and expanding federal regulations.
Ohio’s Warehousing Market Primed for Growth
Ohio is within one day’s drive of half the U.S. population, making it an attractive site not just for many national/international buyers, but by manufacturers but distributors and workers. Some businesses prefer greater control of day-to-day warehousing and are reticent to invite a “middleman” into the mix. But when you outsource Cleveland warehousing and order fulfillment to a first-rate third-party logistics firm, you can devote more valuable resources on things like product development and innovation, sales, marketing and customer service.
If you need more proof of the benefits of third-party warehousing, take a look at Penn State researchers’ data in 21st Annual Logistics Study in 2017 revealing the number of Fortune 500 companies using third-party logistics doubled from 46 percent to 90 percent in 15 years. Small businesses too can carve out a significant advantage when they outsource Cleveland warehousing, particularly when sales are inconsistent throughout the year.
How to Know It’s Time to Outsource Cleveland Warehousing
Even the best products won’t move if they’re routinely delivered late, damaged or not at all. A client may forgive you once, maybe even twice, but you aren’t likely to get another crack at it beyond that – and your competitors will be ready to seize that opportunity.
In deciding whether to outsource Cleveland warehousing, Northeast Ohio businesses should analyze the totality of their resources and capacity. Sometimes even if it can be handled in-house doesn’t mean it should be. Warehousing and distribution is a constant and at times delicate balancing act that involves more than merely securing space. You need qualified managers to oversee it and reliable workers to keep goods moving smoothly. As distribution centers multiply in Northeast Ohio, skilled warehousing workers are becoming just as tough to find as space. It won’t save you money in the long-run if you have to cut corners on quality, service or safety when times are lean.
High-quality logistics facilities cropping up all over the place in big markets like Atlanta, Dallas and Chicago. But even secondary markets like Cleveland, Nashville and Louisville are growing at a rapid clip too. 3PL services reportedly account for 61 of the 100 largest warehousing and industrial space deals in 2018, according to commercial real estate brokerage CBRE. Industry insiders don’t expect a slowdown.
Companies that want to keep operational costs in check may consider scrapping warehousing altogether, particularly considering the speed of modern shipping methods (goods aren’t going to remain on warehouse shelves for long, if at all). However, warehousing is still a hugely important link in the business supply chain.
When you outsource Cleveland warehousing functions, you have a better shot of bolstering profit margins because you’re more likely to be able to take advantage of:
- A centralized location(s);
- Better service with experienced warehousing and transportation workers;
- Value-added delivery;
- Flexibility for scaled or seasonal growth.
If you are considering changing up your Cleveland warehousing strategy, On Time Delivery & Warehousing, Inc. can help you map a plan that makes the most sense for your unique business model – and help you make adjustments as necessary.
If you have questions about outsourcing Cleveland warehousing and distribution 3PL partnerships, contact On Time Delivery & Warehouse by calling (440) 826-4630 or sending us an email.
On-Demand Warehouse Space Gains Traction in Tight Real-Estate Market, Dec. 23, 2018, By Jennifer Smith, The Wall Street Journal
Midwest Facing A Skilled-Worker Shortage As Warehousing Boom Continues, July 18, 2018, By Jess Mador, All Things Considered, NPR
Ecommerce, 3PLs Account for 61% of Major Warehouse Deals in 2018, Feb. 25, 2019, By Mike O’Brien, MultiChannelMerchant.com
More Blog Entries:
Public Warehouse v. 3PL Service Providers: What’s the Difference? Feb. 25, 2019, Cleveland Warehousing 3PL Blog
As a longtime Northeast Ohio 3PL provider in Cleveland, On Time Delivery & Warehouse has a battle-tested supply chain network of carriers and routes spanning the U.S. market and beyond – on ground rails, overseas and in the skies. For most domestic deliveries though, we rely on commercial trucks.
We’re certainly not the only Northeast Ohio 3PL to do so, though our longstanding, loyal customer backing affirms our stake as one of the most trusted supply chain management companies in the Midwest. The U.S. Bureau of Transportation Statistics reports 70 percent of the 50 million tons of U.S. economy freight moved daily is hauled by commercial trucks. Our trucking services clients have the advantage not just of our expansive carrier network, but our own fleet of trailers, box trucks and flatbeds.
Trucking is often the most cost-effective ways to move freight domestically, though as you probably know, it’s not exactly cheap either. Working with a 3PL trucking service can help, getting you better deals on less-than-truckload services and more. In fact, one of the greatest benefits of working with a Northeast Ohio 3PL instead of managing trucking services in-house is: Third-party logistics providers can help reduce your trucking liability risks.
This is an especially key consideration for many firms, given the risk of commercial truck crashes is on the rise.