Present and Future of Third-Party Logistics Companies

 

If you’re engaged in the world of freight transportation, you’ve likely encountered or been part of discussions involving Third-Party Logistics companies (3PL companies. In this blog post, we aim to revisit the concept and significance of 3PLs in today’s business landscape and what we can expect from this business model in the future.

 

 

Third-Party Logistics (3PL)

As we’ve previously discussed, Third-Party Logistics companies specialize in outsourcing various logistics services, such as transportation, warehousing, packaging, and order fulfillment solutions. Their primary goal is to offer swift and effective solutions to streamline supply chain processes. By partnering with a 3PL, businesses can concentrate on their core operations, leveraging their strengths.

One of the crucial advantages of engaging a 3PL is accessing their extensive expertise. Whether you’re a Shipper or Freight Forwarder, investing in a 3PL is the right choice to ensure that logistical aspects outside your own expertise are handled competently. This approach is often better than allocating resources toward developing extensive in-house supply chain capabilities.

After the COVID-19 pandemic, the reliability of 3PLs has become even more evident, given the substantial workload they have handled. The freight transportation industry has recognized the significance of effective data management, visibility, and analytics, which are now key considerations when partnering with 3PL companies. As a result, 3PLs are increasingly investing in technology, with a specific focus on:

 

  • Percentage of supply chain services offering real-time data
  • Percentage of the supply chain that can be remotely controlled
  • IoT (Internet of Things) devices
  • Migrated to the cloud

 

Third-Party Logistics companies have become the first option for providing crucial tech-related functions in the supply chain.

 

And, what’s next?

Due to the increasing reliance on technology and the technological capabilities gap between Shippers, Freight Forwarders, and Third-Party Logistics companies, the question arises as to whether it is worth it to continue entrusting specific elements of the supply chain to 3PLs or if it is more valuable to adopt a model that offers a comprehensive solution to the entire supply chain. This approach is known as the 4PL model.

 

Fourth-Party Logistics (4PL)

4PLs extend beyond the boundaries of 3PLs by offering an extensive range of capabilities supported by technology. They possess the ability to comprehensively operate all facets of the supply chain, enabling customers to access a multitude of logistics service providers. Certain 4PL companies go even further by assisting customers in the planning and execution of their entire supply chain. A key foundation of this model relies on the establishment of trust between clients and suppliers, as trust deepens within the relationship, clients grant 4PLs a greater degree of control over their freight. This concept, known as Freight Under Management (FUM), is essential to the functioning of the 4PL model, as higher FUM correlates with the major success of the model.

 

FUM has experienced an 11% increase from 2019 to 2022, and this upward trend is expected to continue over time. Transitioning from the 3PL to the 4PL model appears to be an attractive idea. However, it’s important to note that 75% of the FUM is currently managed by the top 10 4PLs in the industry, while the remaining 25% is divided among various emerging companies. While the concept seems appealing, it is undoubtedly a challenging effort, because success lies not only in persuading customers to entrust their freight management but also in generating revenue by handling a more complex process.

 

What to aim for?

The Third-Party Logistics companies model continues to play a crucial role in the supply chain process, developing a streamlined workflow is essential to stay competitive and up-to-date. Therefore it is crucial to recognize the tangible opportunity at hand, 3PLs need to continue investing in building extensive networks rich in tech-enabled processes to enhance their capabilities, fostering a vital culture of innovation, cross-selling, and collaboration.

 

At Cargo Care Services we have a top-notch team that excel in Cargo Insurance, Warehousing, Packaging, and Freight Inspections, we are ready to handle key operations within your supply chain.

 

 

Contact us to learn more.

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8 Reasons to Consider Miami Warehousing

Most companies accumulate inventory or other things that their main location simply can’t hold. Even if you have a storage area, if it is not well managed, things can get lost or damaged. If you feel like storage is becoming a problem for your business, you may want to consider Warehousing Solutions in Miami.

Miami is an ideal location for warehousing and logistics services, supply chain, and distribution companies, every important logistics integrator is located in Miami. Additionally, if we talk about wholesale trade, the transportation and logistics industry in Florida has more than 71,600 companies and employs over half a million people around the state.

Here are a few wonderful benefits and knowledge that having a warehousing service in Miami can provide to you and your company:

1. Free Space

The most obvious advantage is getting your space back. Cluttered shops and workspaces hurt productivity. By using a warehousing service you can reclaim your space and know where everything is.

2. Opportunity to Expand

Once your space is free, you can use it however you like. You will essentially be adding value to your space, increasing the amount of usable square footage.

3. Managed Inventory

You will know exactly what you have. You can also have your shipments sent directly to the warehouse, where they will be processed and checked in. This leaves you free to work on your business, rather than bogged down with inventory management.

4. Unlimited Storage

By outsourcing your warehousing needs, you will have flexibility. Instead of being stuck with a storage unit or buying your own warehouse, you don’t have to incur major costs to expand your storage.

Warehousing Miami

5. Security

The warehouse facility is pretty secure as well as insured. It makes sure the safety of your goods. These services also are handled by professionals who are trustworthy.

6. Reduce Overhead

Hiring 3PL services can be quite favorable for your business as it eliminates the extra costs of maintaining your own warehouse and employees. You are free to grow your business. We are able to adapt along with you to accommodate your needs.

7. Expertise

3PLs that are experts in warehousing, fulfillment, and distribution, understand your requirements as they have years of experience in their industries. So, you will rest assured about your warehousing requirements will be met.

8. Better Customer Service

Having several resources and time on your hands will make it easy for you to focus on your clients and in providing them with better quality goods and communication. Also, these services will help you with meeting your customer’s needs by keeping them satisfied.

With CARGO CARE SERVICES you just need to pay for space and then you may use it. This is why access to a public warehouse can be so beneficial to you. This is made affordable when the cost is shared across multiple businesses that share the same public warehouse.

Contact us to discuss your Warehousing project in Miami and our pricing.

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Types of Bonded Warehouses

A customs bonded warehouse, or bonded warehouse, is a secure storage facility that is free from import duties. While in the bonded warehouse, the manipulation of duty-free merchandise is highly regulated. Usually, cargo stored in most types of bonded warehouses cannot be used in any significant manufacturing process, and in some cases is only allowed to be stored for some period of time.

In this post, we are going to explain some types of bonded warehouses:

CFS Bonded Warehouse

A container freight station (CFS) is a facility where ocean or air freight can be transferred directly from the destination port or airport.This is primarily used to de-consolidate inbound consolidated shipments whether arriving via air freight or Container loads. The CFS is also used to bring in in-bond (7512) in-transit freight to be stored. Freight can only be stored within a CFS for up to 10 days. If the freight does not ship out within 10 days Customs will seize the freight.

IBEC Bonded Warehouse

In-Bond Export Consolidation (IBEC) facility is very similar to the above CFS but the freight can store up to 30 days and it’s also on a Customs in-bond 7512 form. This Bonded Warehouse is used to consolidate in-bond freight that’s pending to be exported therefore, they give you 30 days to store it instead of 10 days.

Types of bonded warehouses

Class Three Traditional Bonded Warehouse

This type of Customs Bonded Warehouse requires a formal 7501 Customs entry into the Bonded Warehouse. A Customs power of attorney is needed from the importer to make this formal entry. The formal entry also requires a Customs Bond. Freight within this Bonded Warehouse must be stored at the Customs entry number level and can be stored for up to five years.

Foreign Trade Zone (FTZ)

FTZ is a type of Customs Warehouse that gives you a lot of flexibility. It requires a Customs 214 and tally in form to get the goods entered into the FTZ. The freight within the FTZ can be stored at the SKU level if it is your desire (does not have to store at the entry number level). This freight can be commingled with Domestic freight. Freight within an FTZ can be stored as long as you like without any time limits.

If you need a bonded warehouse you should contact CARGO CARE SERVICES, we have facilities close to the ports/airports in the United States. CHECK AVAILABILITY!

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Facts you should know about Cargo Insurance

 

Cargo insurance is unique compared to other insurance policies. This is because ocean, air, and ground shipments are under a set of laws that limit the liability of carriers.

So how do you better protect your merchandise when it is in transit? Here are some things you should know about cargo insurance and why it’s convenient to add this insurance to your shipments.

1. Accidents occur.

Products shipping is more reliable and more efficient than ever, but there are still numerous reasons goods could be damaged in transit. Investing in cargo insurance can protect you and your business when damage arises.

2. Damaged goods are the shipper or consignee’s obligation.

International shipping laws favor the carrier, limiting carrier liability helps promote trade between nations. So, it is your responsibility what happens to cargo, you can be covered by a cargo insurance policy and when you prepare to ship, make sure your products are packed as securely as possible to minimize the risk of any damage.

3. Purchasing in CIF terms does not mean that you are totally covered.

If you allow the shipper to cover the insurance, they are only required to meet the minimum coverage. Usually, coverage is only from port-to-port. Also, when filing claims you are dealing with a foreign company, and it can be very time-consuming. That´s why acquiring your own Cargo insurance is a piece of mind for you.

 

3. The underwriting process is fluid.

Many insurance policies are subject to strict underwriting mechanisms, but cargo insurance (depending on the commodities) lacks rigid guidelines on what’s required. Our cargo insurance policies are all-risk coverage and can be tailored to your particular risks.

 

Business photo created by katemangostar – www.freepik.com

4. Make sure you understand your policy.

A common misunderstanding when hiring an all-risk insurance policy is to assume that the policy will automatically cover any accident involving your merchandise. This is not necessarily the case. Instead, most all-risk policies state a specific set of situations they do not cover, so be aware of that.

5. You must communicate the nature of your goods.

If you are seeking coverage, you must disclose, commodity, conveyance, merchandise value, and any other material facts that could influence the underwriter in their assessment of the risk. After you provide this information, the insurance company’s decision to accept or decline coverage. The insurance company may also agree to provide coverage but at a higher insurance premium.

6. With Cargo Insurance you take the control

Cargo insurance gives you greater peace of mind because you will know some important aspects as:

  • If there was a claim, would it be filed overseas or in your place?
  • How much money you will receive back? Is there any deductible?
  • Will a claim be paid in your currency?

 

The ins and outs of cargo insurance can be overwhelming. That’s why you can count on companies like CARGO CARE SERVICES who are able to advise you on the best cargo insurance policy for your shipments and support you in the claim process. CONTACT A CARGO INSURANCE EXPERT TODAY!

 

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