Risk is a fact of life for any supply chain. Recent studies have shown that although all organizations, regardless of size, location or industry, face some degree of risk within shipping, few are proactive at addressing them. When disruptions happen, who does your logistics team turn to for support? Who is first to respond and are they trained to handle the situation properly to reduce the amount of impact? How quickly can you find a resolution that stays within scope of your business? Unfortunately, most organizations fail to ask these questions until disasters have already taken place. This can result in a loss of time, money, resources and reputation.
Transportation vulnerabilities can fall into two categories of risk:
1. Day-to-day risks - provoked by the everyday challenges of doing business. These risks include: changes in customer demand, unexpected transit delays, theft or warehouse shortages.
2. All Hell Breaks Loose - This encompasses situations that cannot be predicted and often out of your hands. Examples include natural disasters, epidemics or terrorism.
It is critical for all organizations to ask themselves, ‘What can go wrong?’ and ‘What are my backup plans if the carrier does not show?’ before problems occur. When risks cannot be eradicated, an organization should follow a plan to fully identify, understand and mitigate the risks involved.
However, it can require a great deal of time and resources to create a risk management plan. Further, having a plan, being compliant or having insurance is never enough to protect you from the potential risks that develop year after year. Once the plan has been created, it must be properly implemented within the organization and employees need to be properly trained to react. The deeper we dive into risk management, the more daunting and complex it becomes.
More often than not, organizations find that they do not have the proper knowledge, time or resources available to properly address risks within their supply chain. As a result, this topic is swept under the rug and no plans are created. See this infographic for a more detailed look at risk within the supply chain.
What is your backup plan?
When creating a risk management plan, it is important to give yourself options. Even if your organization has implemented multiple plans for a variety of situations, what happens when your primary, secondary, ect. plans are not applicable? It is important to have flexible resources readily available that can help you through any situation at any time, while still keeping the scope of your business in mind. In terms of shipping, partnering with a 3PL can provide you with a wide range of support 24/7. Likewise, most are able to contact the carriers directly, making it easier to track shipments and quickly resolve issues.
3PLs are a wealth of knowledge and experience when it comes to managing your supply chain efficiently and aligned with your business’ goals. What makes them unique is their strategic partnerships with thousands of asset-based carriers, allowing them to bring your organization options in both service and cost anywhere in the world. Additionally, by partnering with a 3PL you receive the benefit of their multi-dollar buying power in the market. This will cut back on the number of middle men involved when calling on your own behalf to multiple carriers.
For example, if a client has immediate request, calling carriers for expedite quotes can be time consuming and very costly. A 3PL can call upon their wide range of carriers and ensure quality of service, while reducing cost overall.
Partnering with a 3PL can dramatically help mitigate the risks involved with shipping. Whether you have inbound shipments from multiple vendors, or one to a million shipments monthly, a third-party logistics provider has the expertise, experience and relationships necessary to ensure your freight happens as planned. Additionally, when problems arise, your team is not alone to solve the solution themselves. A 3PL can reduce the overall cost, reduce potential damage and provide flexibility within the situation to stay within scope of your organizations goals.