How Third-Party Logistics Operators Can be Beneficial

By Logistics Tech Outlook | Friday, January 15, 2021

The logistics companies are using third-party logistics operators to conduct logistics and transport activities efficiently. 

FREMONT, CA: Logistics and transport operations carried out by third-party logistics operators are outsourced by businesses working in various industries. They are accountable for many roles, such as

• Packing 

• Order fulfillment

• Packaging

• Picking orders

• Inventory forecasting

• Freight forwarding 

Most third-party logistics (3PL) companies deal with thousands of orders every day. Manually planning these orders can add up to costs and delay deliveries. The best way to multiply transport and logistics efficiency is route optimization. Optimization of routes provides distribution vehicles with the quickest, shortest, and cost-effective paths. It helps fleet managers systematically and continually develop their customer service.

Increasing logistics costs

The word optimization implies doing more with fewer resources while at the same time preserving performance. The global supply chain is getting complicated today, and optimization of routes will help simplify it.

How does route optimization reduce costs effectively? 

By helping fleet drivers meet the right customers at the right time, AI-based route optimization software reduces costs. Its smart vehicle routing algorithms can minimize logistics operating costs in various ways:

• Prevents exposure to threats of piracy, traffic, and security. It also reduces costly liability risks, such as insurance.

• Effective routing allows to drive shorter distances and therefore reduces the cost of fuel.

• Less time on the road contributes to a reduction in the cost of vehicle maintenance.

•  The elimination of all the above costs results in an overall reduction in operating costs.

• A decrease in the costs above leads to an overall reduction in operational costs.

Transportation Delays

The transportation challenges faced by third-party logistics:

• Weather

• Vehicle capacity

• Traffic congestion

• Road condition

How can route optimization software speed up deliveries?

But the use of route optimization tools will simplify the preparation of the route, saving money. The route optimization program offers information on the real-time delivery status and anticipated arrival time (ETA). It adjusts and allocates the exact ETA automatically while optimizing routes for other distribution constraints, such as traffic, congestion, respectively. Even in cases of unforeseen traffic disruptions, it offers alternate distribution routes for drivers.

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