3PL or Third-party logistics signifies companies that offer a comprehensive selection of outsourced benefits to industries, inclusive of warehousing and transportation services. While the scope of 3PL companies has evolved with time, there are several industries that make selections based on the size and weight of the concerned shipment. Moreover, the dimensions of shipments determine the transportation and warehousing flexibilities as these are still the basics metrics against which a 3PL company is evaluated.
Evaluating the Transportation Requirements based on Shipment Size and Weight
A third party logistics company outsources transportation based on the carriers and fleet consolidation requirements. With the likes of freight claims, freight auditing and cargo insurance being considered important by the industries, it is the responsibility of 3PL companies to segregate services according to the weight and size of the shipment. It is important to understand that every 3PL service provider comes across with an operational profile, depending upon the organizational requirements. However, there are two specific types of shipping practices which eventually determine the transportation strategies used by the concerned 3PL company.
The LTL Shipping Technique
Based on the size and weight of the concerned freight, industries often select a suitable third party logistics company. For shipping smaller and lighter commodities, LTL or rather Less that Truckload concept is followed. The underlining principle of LTL shipping is that the goods are way too large to be sent across as separate parcels but also way too small to fit in as the entire truckload. Therefore, smaller shipments need to be transported via 3PL companies that offer LTL services as some service providers often charge for the entire container even if the shipment fills less than half of the volume. Apart from hiring LTL-centric 3PL companies, industries can also look for service providers that offer discounts on LTL shipments provided they are incapable of filling up the allotted spaces. In cases like these, the 3PL companies fit in some other goods, likely to be off-loaded during the course.
When it comes to analyzing the LTL shipping process, the carriers collect commodities from shippers before consolidating the same across trailers and concerned trucks. While line-hauling is an essential part of the process, there are times when the freight gets sorted mid-way and consolidation happens at certain local destinations. Drivers usually defer unloading by a day and make new pickups when the carriers are empty.
Freight density is one metric which determines the deployment of a 3PL vendor. Certain companies offering LTL shipping services predefine rates according to shipment density. Classifying freights according to the density requires companies to calculate the shipment and pallet weight and divide the same according to the volume. In preferred cases, higher product density results in lower shipment costs.
Apart from the product density, distance is also a major factor that determines the shipping rates and even the nature of the hired 3PL companies. In addition to that, FAK or Freight All Kinds service is something that LTL companies specialize in. Lastly, 3PL vendors offering LTL shipping services usually swear by the concept of ‘Minimums’. This aspect determines the minimum shipment cost for a particular company below which a service provider would reject the proposal. In most cases, carriers offering LTL shipping facilities hike the minimum shipping rate by 2 to 3 percent, annually.
FTL Shipping: Shipping Homogeneous Cargo
Probably the simplest approach to assessing carrier shipping, FTL or Full Truck Load technique requires an organization to hire the entire trailer or container for transporting the freight. Moreover, the FTL shipment is never handled along the route and doesn’t involve transfers, sorting and even repackages. These shipments are handled by drivers which have a fixed timeline of work. In addition to that, FTL packages usually move at a fixed rate.
When it comes to analyzing the FTL shipping techniques, the concerned freight is first loaded onto specific crates and then delivered across destinations.
When it comes to assessing the services offered by third-party logistics, LTL and FTL shipping techniques come forth as the most comprehensive ones. Moreover, industries prefer brainstorming before zeroing in on the perfect 3PL company based on the dimensions and weight of the freight. While the weight is probably the second most important factor, size or rather the density of the commodity determines the kind of carrier required to ship the same.