Working with third party logistics providers

Businesses of all sizes have faced exceptional challenges over the past year, as Covid-19 brought economies grinding to a halt. For smaller businesses in particular, the pandemic has exposed areas of the supply chain that are not working as effectively as they could and demonstrated where some cost cutting might be necessary.

In Capgemini’s Fast Forward report on supply chain resilience, it found 69% of organisations experienced difficulties in balancing stock between warehouses, while 69% had difficulties with products being held up in ports or across borders.

In all, 72% of respondents encountered challenges in end-to-end monitoring of the supply chain, among other issues. It is also clear that there are still major logistics hurdles to overcome when it comes to navigating the ongoing public health crisis. In addition to this, supply chains have also been further complicated by fractious US-China relations and the United Kingdom’s recent departure from the European Union.

A helping hand

According to research carried out by the Economist Intelligence Unit and sponsored by DP World, 13.2% of companies have already reconfigured their supply chain in response to pandemic-related disruptions.

But for those companies still going through this process, third-party logistics providers could provide some of the answers. As firms seek to outsource elements of their distribution, warehousing and fulfilment network, 3PLs are well poised to add efficiencies.

First and foremost, 3PLs allow companies to dedicate resources to other critical business needs, such as manufacturing processes or customer service. Alongside this, they also offer additional expertise, such as on-the-ground knowledge of the business and regulatory environment in local markets.

For companies that have previously experienced issues with shipments at ports and borders, this sort of expert knowledge can be particularly invaluable. 3PLs have experience of handling shipping delays and are able to take care of documentation issues on a client’s behalf. And, by engaging the services of a 3PL, a business can reduce its logistics and warehousing costs, and benefit from the competitive pricing they negotiate on behalf of their clients.

Added agility

Over the past year, many businesses recognised a need to improve resilience and agility in their supply chains. Working with expert 3PLs can certainly help. At DP World, we believe this is likely to become best practice in the months ahead.

Our 3PL operation at Caucedo in the Dominican Republic demonstrates the strategic value that being a leader in port-centric logistics can offer. Free-zone warehouse storage availability at Caucedo allows large exporters to the Caribbean to use the port-side logistics park for their regional fulfilment centre. This has been particularly valuable for large manufacturers and retailers that ship from different origins.

Port operators are the only physical link in the handling chain that collaborates with sea transport, domestic transport, customs, and cargo owners. And with 80 terminals and logistics parks, DP World is at the centre of smarter logistics, making us an integral part of the supply chain for stakeholders. In India, for example, we have created an extensive network of logistics assets, including express and 3PL services.

It is through initiatives like these that supply chains will be strengthened in the future. Through partnerships and innovation, businesses can make significant time and cost savings. Only then can they be truly ready for the future ‘unknowns’.