The third-party logistics sector has become highly competitive in the last few years. Much of this is due to capacity. Capacity concerns are altering how various shippers interact with providers. In a recent 3rd Party Logistics Study, it was reported that 29% of shippers have said to engage with a larger number of 3PLs to get access to more capacity. These capacity concerns trickle down the supply chain, and what they mean is that third party logistics companies need to have a ready supply of transportation to fulfill their shipper/customer requests.
That being said, the relationship between a carrier and a third-party logistics company is central to the success of the 3PL. When a great relationship is formed with carrier companies and their drivers, a 3PL company can rest assured that those partners will be consistent in doing business with them, and ultimately help them to fulfill their customer/shipper obligations. Consequently, carriers and individual drivers can leverage this relationship to help reduce their operating costs, and ultimately make more money. Reliable 3rd party logistics companies have many offerings that can benefit drivers. Below, are our top tips on how you can save money and ultimately make more driving for a reliable third-party logistics company.
1. Get on a program or round-trip agreement with your provider
Going dedicated with one provider can save you time, which ultimately saves you money. You will spend less time on the phone looking for loads, and more time running your equipment. Many providers have program offerings, which also has the benefit of a driver getting to know regular shipping and delivery locations, and their processes. Another bonus of getting on program business or round-trips with your transportation provider is that many times it gives you a schedule, so you will know what days you will be home and what days you will be on the road. Great for drivers with families!
2. Access their capacity for shippers/customers
3rd party logistics providers have access to markets and customers you would otherwise not have access to. This can keep you busy during quiet months, giving you more freight and variety of loads through leveraging our sales personnel, financial capability, IT resources that manage customers’ electronic TMS systems, and customer required EDI integration.
3. Leverage their technology to save you money
Most 3rd party logistics providers use industry load boards, state of the art mapping/GPS software, and document imaging systems. Industry load boards are online websites that third-party logistics companies use to access trucks outside their regular network. A reliable 3PL are vetted by these online resources, and will publish their bond and average days to pay on these sites, which are often free for truckers to use. Most 3PLs also use mapping and GPS software that has been specifically designed and marketed to the trucking industry. They are more reliable than google maps, which can sometimes provide a route that is not trucker-friendly, which can mean time and fuel wasted in turnarounds or rerouting. Like online load boards, these have annual/monthly fees associated with them, so leverage this software for free when you contact your 3PL provider, and get them to do the research and routing for you. A third technological area that 3PL providers use that you can leverage to your advantage is document imaging. Most will provide free or low-cost options for drivers to send them documents such as in transit customs paperwork, delivery invoices, bills of lading, and more. This can save carriers hundreds of dollars a year over faxing or mailing costs.
4. Research their payment options and other extras
This is a key area where carriers can save money, improving their bottom line. Pay special attention to a 3PL providers payment terms. Many offer great quick pay and advance terms, but they can come with hefty fees that can eat into your final payment. Check with your transportation provider on what their terms for advances and payments are, and what options for providing these they currently have. Most often, you will find this will make the choice between two providers easy for you! Pick the one that has great service and great extras that are carrier-focused.