Management InSites

The Changing World of 3PLs

Third-party warehouses (3PLs) have historically provided companies with an invaluable service: the ability to store inventory and ship it out to customers around the globe. These warehouses are experts at packaging products to maximize order fulfillment. Many also have branches across the country to make shipping to customers in different geographic locations cheaper and more efficient.

Despite their long list of benefits, 3PLs have their shortcomings as well. For companies that experience seasonality or other fluctuations in inventory or shipping frequency, 3PLs can sometimes be problematic, especially if they aren’t staffed or otherwise equipped to handle sudden increases in activity.

Logistyx Technologies says that “[d]ue to the increase in shipping volumes attributable to the surge in ecommerce propelled by the COVID-19 pandemic, carriers enacted an unprecedented number of rate increases, surcharges, and fees in 2020.[1]” Accordingly, many 3PLs have also begun to cater to businesses that operate heavily in the ecommerce space. As such, companies that have a large volume of inventory and high turnover seem to be the ideal fit for third-party warehouses in this new COVID world.

Unfortunately, companies that are just starting out, that are in flux, or that have seasonal shifts in inventory cannot meet the minimum requirements of many 3PLs. That means that these businesses have to fend for themselves. They must opt to drop ship to customers or find an alternative solution for storing inventory and processing orders.

Fortunately, small-scale warehousing options do exist, even if they aren’t easy to find. Searching locally for a business that provides order fulfillment and storage as an intermediary solution is key. Such services might be able to offer flexible solutions or other benefits that larger 3PLs do not. Until a company has an order volume that is appropriate for a 3PL, taking the time to search for a smaller option that is a good fit is worth the work. It will end up saving money and frustration in the long run.

 


[1] Logistyx Technologies. “7 Logistics Trends That Will Radically Change the Manufacturing Industry in 2021.” Logistyx.com. 2021.
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How can we help you?
Contact us or submit a business inquiry online.
Read more
  • To Palletize or Not to Palletize?

    When it comes time to ship inventory to the United States, many foreign companies are unaware of the standards surrounding palletizing their shipments. While it is possible to ship a container oversees without pallets, it might not be the most cost-effective solution, especially when using an established warehouse or 3PL.

    October 4, 2021
  • Breaking Into the U.S. Water Sector: The Vast U.S.A.

    When considering entry into the U.S. market, it is imperative to remember how vast the U.S. is. While the water in most areas of another country with a small geographic footprint might be similar to one another, that is not the case here.

    July 26, 2021
  • International Shipping and Incoterms

    When dealing with shipping internationally, especially from abroad to the U.S., setting the terms of the transaction from the moment the customer requests a quote is incredibly important. To avoid problems, unwanted costs, and even potential legal issues, there should be no room for confusion or ambiguity in the contract you set up with your customer.

    March 8, 2021
  • Shipping with HS and HTS Codes

    If your organization intends to ship or receive items to or from overseas, it is important to understand an integral part of the international shipping process: the Harmonized System (HS) and Harmonized Tariff Schedule (HTS), which were developed by the World Customs Organization.

    February 8, 2021
How can we help you?
Contact us or submit a business inquiry online.

The Changing World of 3PLs

In our previous post on the topic, we covered some important things to remember when setting up your company in the U.S. market. Beyond operations, sales, and marketing, a manager would be remiss not to focus on how cultural differences might impact the success of a subsidiary.

The U.S. is not homogenous

Unlike several other countries, the U.S. is vast – and not just in its size. Americans tend to break up the country into its East and West coasts, and the Midwest. But there are even more segments, like the South, Pacific Northwest, the Northeast, Florida, and Texas – all of which differ greatly from each other. There are several big cities, countless medium-sized markets, and even more rural or suburban areas. Interacting with people living in big cities will differ greatly from interacting with people in smaller towns. While it would be unwise to generalize, it is best to understand the culture of the part of the U.S. in which you are doing business before having expectations.

Patience is not always a strength among Americans

When in negotiations or conducting business, Americans tend to want to just get the deal done. While many other cultures take their time, get to know everyone involved, and move along at a comfortable pace, those in the U.S. do not always see a need to drag things out. Get ready for what looks like impatience, when in reality it is just a desire to be efficient and effective.

Don’t plan on in-person meetings 

At least not all the time. The tendency for Europeans and Asians to conduct most business in person is not the same in the U.S. Phone calls, emails, and now even video conference calls are the norm. Businesspeople like to work efficiently, and don’t gather in person unless it is necessary. First meetings, larger negotiations, and important topics are generally discussed in-person. Otherwise, don’t be offended or surprised if many of your interactions are taking place remotely.

Open-minded over traditions

A positive aspect of Americans in general is their ability to have an open mind. Many other cultures rely heavily on traditions, and act in certain ways because history dictates that they should. That is not the case in the U.S. Americans tend to welcome new ideas and concepts perhaps more freely than their foreign counterparts.

That being said, Europeans tend to rely on strongly forged bonds in which trust is paramount. Loyalty is key. Americans tend to be looser and more pragmatic when it comes to doing business. They don’t necessarily need to have known someone for years to begin working with them. At the end of the day, it’s about getting the deal done.