Why Choose a LSP Over a 3PL?
In This Issue: Are You Surprised by These Observations?, Translogistics is SmartWay Certified… Again!, We’re Hiring!, Check Out Our New Look, Employee Spotlight
As the third-party logistics (3PL) industry has developed and matured, a number of different business models have emerged to meet the needs of companies of all sizes and across all industries. While largely positive, this momentum has also created hurdles for corporate executives who want to leverage an outside provider’s strengths and capabilities, but really don’t understand the nuances among those different providers. It also creates confusion for current users of 3PL services that don’t realize their own current processes and procedures could be vastly improved with the help of a logistics solutions provider.
Here are five reasons to choose a logistics solutions provider over a 3PL:
Are You Surprised by THESE OBSERVATIONS?
Noel Perry, economist for Freight Trends Research (FTR), recently published an article titled: Big Data and Truckload Pricing.
One of his three observations may come as a surprise to many given the current glut of capacity in transportation, but it actually reinforces previous study results.
Observation 1: Spot prices have been rising more than contract prices based on a starting point of the first quarter of 2008. Contract prices have averaged a 1% q/q growth (annualized) while spot contracts have averaged 2%.
This reinforces the theme TLI has been saying year after year, “Contracted rates will save you money in the long run and develop strong carrier relations, so capacity is there when the market tightens up.” It is tempting with capacity as it currently sits to abandon contract rates and chase the spot market rates, but it will hurt you with higher rates and less equipment availability in the long run.
Observation 2: Spot market rates are way more volatile. This isn’t surprising, although the study found that “spot rate growth varies five times more than contract rate growth.” This could be significant.
Observation 3: Both spot and contract pricing lag changes in capacity utilization. Not a surprise either, although spot prices have about a quarter lag while contract prices tend to peak two quarters after spot rates move. When rates are going up, it is best to have locked in contract rates because it’ll be longer before the effect of higher rates are reflected in the contracted rates. When rates are going down, it’s best to have spot rates so they can be used sooner.
With the current state of low rates and the expectation of higher rates due to upcoming regulations, chances are that rates will be going up and not down.
What does this mean to you? If your rates aren’t contracted and you are depending on the spot market for LTL and TL rates, you are leaving money on the table in the long run and may hurt your supply chain when capacity gets tight, and the carriers pick up for those organizations that contracted their rates and remained loyal during the increase in capacity. Our recommendation is to get with your Logistics Service Provider to lock in rates with the carriers now.
To learn how you can lock in rates by partnering with Translogistics, email us.
Scott McDevitt, President of Translogistics
Translogistics Partners with SmartWay Again!
In our efforts to be an environmentally conscious company, Translogistics has joined the SmartWay Transport Partnership for the 4th year in a row! This partnership is an innovative collaboration between the U.S. Environmental Protection Agency (EPA) and the freight industry, designed to increase energy efficiency while significantly reducing greenhouse gases and air pollution.
The EPA’s SmartWay Transport Partnership is a government and industry collaboration between the EPA, freight shippers, carriers, logistics companies, and other stakeholders, to voluntarily achieve improved fuel efficiency and reduce environmental impacts from freight transport. Participating companies benchmark their current freight operations, identify technologies and strategies to reduce their carbon emissions, track emissions reductions, and project future improvement. SmartWay partners demonstrate to customers, clients, and investors that they are taking responsibility for the emissions associated with goods movement, are committed to corporate social responsibility and sustainable business practices, and are reducing their carbon footprint.
We do our part in contributing to SmartWay’s goal of reducing emissions of carbon dioxide, nitrogen oxides, and air-polluting particle matter. This goal is accomplished by working directly with our freight carriers to consistently improve their environmental performance while also using the tools needed to consolidate shipments and reduce our carriers’ carbon footprint.
At TLI, we believe it is our social responsibility to help reduce transportation pollution by initiating conscientious practices with our freight carriers. It is our goal every day to help our customers achieve the most cost and fuel effective methods for moving their products.
To learn more about the Smartway program, visit: http://www.epa.gov/smartway/
LSP, not 3PL… continued
Here are five reasons to choose a logisitics solutions provider over a 3PL:
- Logistics solutions providers take basic 3PL services to a new level. An LSP integrates, assembles, and manages the resources, capabilities, and technology to deliver a comprehensive supply chain solution. By seamlessly integrating with a company’s logistics team without embedding a resource on site, executives are able to augment the effectiveness of their current logistics operations.
- Unlike 3PLs, Logistics Solutions Providers help organizations dig down deep into their data and information to help ferret out the best practices and strategies for the future. Using key performance indicators (KPIs) and solid reporting, for example, executives can achieve better cost savings, improve their companies’ overall transportation budgets, and capture information that’s useful across all departments (finance, sales, marketing, and so forth).
- LSPs help fill supply chain visibility gaps by providing the latest software options that don’t require upfront investment or ongoing maintenance on the customer’s part. Logistics solutions providers give customers reports that are easy to access and customizable and thus introduce companies to an entirely new layer of visibility across their entire supply chain.
- 3PLs can’t drive innovation across the supply chain as effectively as a Logistics Solutions Provider. A true logistics solutions provider can help companies “wow” their current and prospective clients with state-of- the-art technology, while at the same time showing that those companies care about damage-free and on-time delivery of their product—not just a cheap freight rate.
- Logistics solutions providers offer systems that integrate well with other processes and functions in an automated and error-free manner. A transportation management system (TMS), for example, must be able to provide clear visibility of shipments as they move across the supply chain. There is usually an underwhelming usage and implementation of Transportation Management Systems and the ongoing need for businesses to get more out of their logistics providers. A quality logistics solutions provider—not just a 3PL—can help companies overcome this pressing challenge.
Contact one of our logistics experts to learn how a Logistics Solution Provider can help you simplify and optimize your logistics.
Now HIRING- COME GROW WITH US!
We are growing in leaps and bounds this year at Translogistics, so in order to service our clients to the best of our abilities, we need a few good men and women. Positions are available for both Truckload Brokerage Specialist and Logistics Specialist. Why Translogistics, Inc.? TLI offers great benefits, a sincere open door policy, and an awesome work culture. Email US for a job description and see if you’re a fit!
Check out our New Look!
Our website has gotten a fresh new look and we think you’re gonna love it as much as we do! You will now be able to easily access our videos, newsletters, airfreight and density calculators, and more. Take a look around and let us know what you think by clicking here.
Meet Melanie Bernstiel
Melanie has been a Logistics Tracking Specialist since April of 2015 and helps to ensure that clients’ shipments are picked up and delivered. Daily she works with clients and carriers to help resolve pickup and delivery issues while updating ViewPoint with the most current information on shipments.
“I really enjoy talking to people all over the country and helping our customers resolve issues.”
Married? Children? I have been married to Matt for seven years and I have a twenty year old daughter, Ashley. I also have a Pitbull named Skylar (rescued from a backyard breeder) and 2 black cats named Roxy and Riley (also rescues).
Favorite free time activity? Spending time with my family, cooking, decorating and entertaining.
Involved in a charity? My family and I are Pitbull advocates and strive to educate others on the injustice of Breed Specific Legislation, backyard breeding, shelter overcrowding, and dog fighting. We marched on the West Lawn of the Capitol Building in Washington DC with thousands of others in May of 2014 in an event called the One Million Pibble March to help educate and bring awareness to the injustice that this misunderstood breed faces. We believe in always being the voice of the voiceless.
“Melanie is very passionate about her job. She takes pride in what she does and getting the job done correctly. She’s a great co-worker!”
- Warren Cuff, Tracking Specialist
“You may never know what results come of your actions, but if you do nothing, there will be no results.”
- Mahatma Gandhi
Paulius Putna: 9/25/12
Holly Vining: 9/28/09
Kati-Ayn Garman: 9/28/15
Pauline Kramer: 10/14/13
Bob Frye: 10/17/05
Kevin Nguyen: 10/20/14
Ed Caldwell: 10/22/07
David Orr: 9/10
Ben McDevitt: 9/25
Kevin Nguyen: 10/17
TJ Pal: 10/20
Has Translogistics achieved extraordinary results for you and your company? Have we been steadfast partners through good times and tough? Have we helped you cut costs, find efficiencies, boost productivity, and keep your supply chain flowing? Visit this link to cast your vote for Translogistics to be a part of Inbound Logistics’ Annual Reader's Choice: Top 10 3PL Excellence Awards.