Shipping can easily be one of the most significant expenses in any business. Especially if you are shipping less-than-container load (LCL) goods. If you are wondering how to cut these costs, you're certainly not alone. One solution that is gaining traction is 3PL warehousing.
What Is LCL Shipping?
Before getting into some tips and tricks about saving money on shipping, we should define what LCL shipping is. LCL stands for the abbreviation of Less-Than-Container Load. This is actually telling you what this shipping option basically entails. You will be shipping with other shipments within a container.
You won't pay to fill up the entire container, only paying for the amount of space your goods take up. However, LCL shipping generally costs more than FCL shipping. These costs can add up to handling charges, loading, unloading, and inefficiencies associated with shared shipping.
But there is good news. The 3PL storing will help you overcome these costs. Here is how:
1. Optimised Inventory Management
Efficiency in shipping is heavily dependent on the effective management of your inventory. For LCL shipment charges, one way 3PL storing will cut them down is through optimised inventory management.
- Consolidation: The first aspect, consolidation, that 3PL providers offer is the consolidation of shipments, thereby bundling your goods with other shipments, cutting down on the costs.
- Reduced Storage Costs: Flexibility in storage also characterises 3PL warehouses. When you use space, you pay; with conventional warehouses, charges are made for the whole storage.
- Reduced Handling: If the inventory is well managed, there would be less handling, which means costs would be reduced even further.
Thanks to this streamlined process, most businesses will find they save on shipping in the long run.
2. Efficient Shipping
3PL warehousing increases shipping operations to be more efficient. You probably know that efficiency is one major factor in reducing costs.
- Better planning: As a first point, 3PL providers are well-versed in the shipping process. They plan routes and optimise delivery times which reduces transit time and costs.
- Batch Shipments: Another advantage of using 3PL providers is that you can group shipments together. This means you avoid more expensive smaller separate deliveries.
- Fewer Delays: Also, because the 3PL provider has established relationships with shipping carriers, delays are also reduced, saving extra storage and handling expenses.
What do you gain? Faster delivery, fewer errors, and even lower shipping costs
3. Flexibility to Tap Advanced Technology
Technology plays a big role in modern logistics, and 3PL providers invest in advanced systems that make shipping more efficient and affordable.
- Tracking in Real-Time: One of the primary things is probably this: the potential to track your shipment in real-time. This way, 3PLs reduce the chance of making errors and also of delays during delivery or pick-up, which reduces the overall cost.
- Automation: Another benefit is automation in the warehousing process, like picking and packing processes while checking up on items. They save time and reduce human error. This again cuts down on labour costs and shipping fees.
- Data Analysis: Not to mention, many 3PL providers apply data analysis to optimise routes and methodologies of shipping, therefore further cost-cutting.
As a result of such technological advancement, 3PL providers can indeed quote lower shipping charges without degrading the quality of service provided.
4. Savings on Shipping via Consolidation
3PL storing saves businesses on shipping costs through consolidation. So, what is consolidation and how does that benefit?
- Pooling Services: Most of the 3PL providers pool services from different clients. As one shipment after another is accumulated, it provides more containers that can be claimed for volume discounts.
- Volume Discount: Large-scale 3PL providers also benefit by passing on volume discounts claimed from shipping carriers to their clients. Such volume discounts apply to any business's LCL shipments.
- Fewer Shipments: As a result, you could have fewer shipments. Rather than shipping multiple small loads, you could mail them in one shipment, thus saving money.
In short, the more shipments your 3PL provider has to manage, the cheaper shipping is going to be for you.
5. Flexible Storage and Distribution Options
Flexibility is the biggest advantage of 3PL warehousing. Flexibility has a number of ways to mitigate the charges of LCL shipment.
- Pay-As-You-Go Storage: Most 3PL providers offer pay-as-you-go storage to begin with. This means you do not have long-term contracts; instead, you get to scale up and down according to your business's needs based on demand.
- On-Demand Distribution: There also are on-demand distribution services from 3PL providers. You just make use of the pay-as-you-use basis for the services, and you will avoid the unnecessary charges that come along with the shipment.
- Scalability: Since your business is going to keep growing, the 3PL providers thus offer scalable solutions that go up to your needs without increasing the costs initially.
These flexible options make 3PL storing cheaper to store and distribute your goods, thereby reducing LCL shipment costs.
6. Reduced Administrative Burden
Shipping logistics management is time-consuming and costly, but 3PL providers help break these burdens by handing them over to them.
- Documentation: The first is documentation. They maintain all paperwork associated with shipping; that is, customs documentation. This minimises the likelihood of generating errors which often cause delays and very costly penalties.
- Compliance: More so, they are compliant with all requirements of international shipping regulations. This minimises fines or even extra charges.
- End-to-End Management: Lastly, 3PL providers offer end-to-end management which lets business organisations focus on their core business while logistics is professionally managed.
The companies save time and money by reducing administrative costs; hence, the total shipping cost will be lower.
Conclusion
3PL storing provides various opportunities to cut the LCL shipment charges. Optimising inventory management, transparency to costs, and streamlining shipping all result in higher accuracy rates along with cost savings. Consolidation, technology, and flexible storage options help save a business huge loads in terms of shipping costs. If you want to cut your LCL shipment costs, the way out of the trouble would be to partner with the right 3PL provider.
Also Check: Understanding LCL Shipment Charges for Your Business
Name: PAL Line Pte Ltd
Address: 46 East Coast Road, #09-06, East Gate @ Katong, Singapore 428766
Phone: +65 6377-1929 / 6011-9129
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