A third-party logistics (3PL) warehouse acts as a logistics partner to its customers, helping them navigate all the complexities of the supply chain. As such, 3PLs provide expert guidance on everything from inventory management to picking, packing, and shipping orders for their customers, but their expertise does not end there. With the exponential rise of ecommerce and associated push for omnichannel fulfillment strategies, 3PLs also offer several value-added services that go beyond typical warehousing and sets them apart from the competition, making them more attractive to customers.
Below you will find the five best value-added services a 3PL warehouse can offer.
Negotiating Shipping Rates
In addition to shipping items for their customers’ businesses, 3PLs often negotiate better shipping rates with major shipping carriers on behalf of their clients. According to the 2022 State of the Third-Party Logistics Industry Report, “transportation and freight expertise top the list as to why businesses look to partner with a 3PL” because of their experience finding the best shipping rates, navigating domestic and international shipping and transportation methods, and above all, the relationships that 3PLs have cultivated over years with major carriers.
When a 3PL negotiates better rates for shipping, they save on operational costs for both themselves and their customers. This is especially relevant when their customers operate small businesses and simply do not have the order volume to leverage negotiated rates with carriers themselves. Negotiating rates for shipping from the 3PL also helps appease the heightened demands of consumers who want cheap but fast shipping, making negotiated shipping rates even more valuable as a value-added service for ecommerce businesses.
Kitting and Assembling Products
Kitting, or assembling, refers to combining several products, or SKUs, into one easy-to-pick package. For example, a warehouse may kit items together that frequently sell together or that combine to make the end-product sold to the consumer if it receives an item disassembled. The assembled item usually has a different SKU than each of its components, so a 3PL needs an organizational strategy, preferably in the form of warehouse management system (WMS) software, that can track the combined SKU and assign available inventory for the component SKUs with ease. Otherwise, the 3PL may think it has more of each component SKU on-hand than it actually does since they took inventory out to make each assembled product. Kitting is an essential value-added service because it saves the warehouse time in picking orders because warehouse workers only need to pick one bundled item as opposed to all the separate parts. Pick time being the most time-consuming procedure in warehousing, this reduction in picking time greatly increases a warehouse’s operational efficiency and leads to a shortened delivery time for orders.
Repackaging and Rebranding
Repackaging and rebranding of products helps 3PL customers customize their products for sale to consumers. Consumer expectations regarding shipping times and flexibility of delivery channels are well-documented, but consumers also expect a high degree of personalization out of their packaging. According to Jenny Stanley, “brands are designing packaging so that how the customer encounters it and then unboxes the product become part of the experience.” This includes custom insert cards with mail-order packaging, up-and-coming smart packaging using QR code technology, on-trend sustainable packaging, and beyond. To serve its customers with their packaging and branding needs, a 3PL offering this value-added service must keep a variety of specialized packaging in stock and take extra care during the packing process to ensure the branding of each package is accurate. 3PLs offering repackaging and rebranding as value-added services go the extra mile to offer the best consumer experience for their customers, helping them build brand loyalty and standout among other retailers.
Managing Recurring Subscription Boxes
Recurring subscription boxes are a huge trend from ecommerce retailers across verticals ranging from food and beverage to beauty and wellness to nutraceuticals to clothing and more. In many ways, subscription boxes are a combination of kitting/assembling and repackaging/rebranding because the 3PL must fill personalized boxes with assorted items for one complete package. However, managing recurring subscription boxes adds another layer of complexity to the 3PL’s workflow as they must meet strict shipment deadlines. Consumers expect their subscription boxes at the same time each month, so 3PLs must be diligent when fulfilling these orders to ensure packages leave the warehouse on the right day to reach the consumer by the desired date. Furthermore, because these subscription boxes are ongoing, the 3PL must have a detailed system and the right technology in place to manage this process month after month. This system includes having the infrastructure to complete large wave picks as well as high-volume batch generation and printing of shipping labels.
Reverse logistics is a major component of omnichannel fulfillment strategies because ecommerce also creates returns that companies must process. 3PLs need to accept and process returns no matter how or where the consumer made the purchase, and consumers are looking for easy returns methods as well. 3PLs that offer returns processing can help their customers save time and money meeting consumer demands with consistent warehouse processes and technology that can track orders and handle returns regardless of the source. For example, an order management system (OMS) like Extensiv Order Manager can easily create RMAs or returns within the software to keep returns organized seamlessly for both the 3PL and their customers. For any 3PL looking to have a complete omnichannel fulfillment package, having the right technology to handle returns is essential.
For more information about what value-added services the leading 3PL warehouses offer, read the 2021 3PL Warehouse Benchmark Report.