| Company > News Growth Strategies for Third Party Logistics Companies How Using Freight Payment & Audit Services Can Help Position Your Company for Growth. By J. Peter Donlon, Executive Vice President, API Outsourcing In today’s dynamic 3PL market, customers are demanding more services every day. According to a recent survey, 84%-90% of companies using 3PL suppliers believe that 3PLs should provide a comprehensive set of offerings. Almost half of those respondents further stated that their companies were reducing, or at least rationalizing, the number of 3PLs they currently use. Based on these findings, 3PLs must differentiate and expand their services in order to satisfy their current customer base and grow their business. With limited resources and the need to stay innovative, many 3PLs are looking to outside solutions to help build and improve their unique product offering. By partnering with experts, 3PLs can experience high quality services without a hefty investment, and better utilize resources to focus on future growth. - Some of the questions that may determine if an outside solution makes business sense include:
- Current Operations – Are they as efficient as they can be?
- Product Differentiation – Does your offering provide unique benefits that will set your company apart as an industry leader?
- Client Satisfaction – Do you have strong client relationships and are they satisfied with your service offering?
- Technology – Are you staying on top of the latest technology to retain your competitive edge?
- Resources – Do you have sufficient resources to focus on future business needs?
The answers to these questions can uncover issues that may be resolved through the utilization of an outsourced solution. Sourcing decisions can be a fundamental element of a long-term strategy. Factors such as cost, expertise, technology, risk mitigation, limited resources, problem-solving, or innovation may play a role in deciding whether to search outside your company for a solution. Freight Payment and Audit Services as Growth Strategy Solution
One approach that 3PLs can take to position themselves for growth is to partner with a freight payment and audit company to handle back-office freight payment processing. Leading freight payment and audit companies are abreast of the latest technological advances and utilize best practices to manage their business. Partnering with an outside provider can benefit your company in a variety of ways. Cost Savings
Automation of freight payment and audit services can improve manual or substandard processes, which helps 3PLs realize cost savings. And these savings can be significant. Companies can save up to 60% in processing costs, and transportation savings can be as much as 7% with a pre-payment audit. Retention of Current Clients
3PLs that offer a substandard freight payment and audit service can increase the retention of current clients by providing a better solution to their clients. Not all freight payment solutions are alike. High quality freight payment and audit solutions should include business flexibility, robust features and extensive management reporting tools. Additional Revenue Stream
If a 3PL doesn’t already offer freight payment services, using an outside partner to supply these services will help 3PLs gain an additional revenue stream without a huge investment in capital or technology. Not only does this save 3PLs money, but implementation can be completed in a matter of weeks instead of months or years. Time to market can be critical in a highly competitive environment. Focus on Future Growth
Of equal importance to 3PLs is ensuring that necessary resources are available to focus on future growth strategies. Many 3PLs spend considerable time and money on extraneous processes, expending unnecessary resources. In order for 3PLs to thrive in the future, the focus will be on core competencies instead of back-office operations. Automated freight payment processing can streamline the manual process to free up time to focus on future needs. Successful companies look externally as much as internally as they plan their business goals. 3PLs that only have time to focus on day-to-day operations are at a big disadvantage. Determining the Best Partner for Freight Payment and Audit Services
Evaluating prospective partners can be a daunting task. 3PLs can compare freight payment and audit services in many ways. The most obvious comparison methods are by price and service features. There are several other items to be considered before signing a contract that may be critical to ensuring success. Partnership Approach
When selecting an outsourcing partner, it’s important to evaluate the company’s approach to the relationship. In order to maximize the relationship, both the vendor and the 3PL need to look at the relationship as a long-term investment. Even if the contract expires within a couple of years, the goal is to work with a company that wants to continue the relationship for the long-term. This means the partner should continuously improve their offering, utilize best practices, and seek opportunities to expand the relationship to better serve the growing needs of the 3PL. Comfort with Partner
When making long-term commitments, business leaders trust their instincts. There has to be a mutual trust and respect between parties in order for the relationship to thrive. Even if pricing and service features are in line, if a good relationship hasn’t been established during the sales process, there may not be a good fit in the long run. High Standards of Performance
Leading freight payment and audit companies will adhere to established standards of performance and service level agreements. Evaluating processing time commitments, the use of Six Sigma techniques, and the use of dedicated client service representatives are important factors to consider. Established Clear Goals
Another point of differentiation is how the project has been defined. Does the freight payment and audit vendor understand the unique goals and objectives of the project? Agreeing on the objectives may be the most important component of any vendor relationship. If objectives are not clearly defined, it’s hard to measure progress. Monitoring of Progress
Does the freight payment and audit company continue to stay involved and measure progress? Leading freight payment companies show 3PLs how their services help them meet their business objectives. If clear objectives are defined, metrics will be developed to measure those objectives. Monthly or quarterly scorecards, along with regular meetings, help both parties think strategically about whether or not the business objectives are being met, and what improvements can be made on both ends to ensure success. Conclusion
A best-of-breed freight payment and audit partner provides innovative services. Using such services can help 3PLs grow by differentiating their offering in the marketplace, thus increasing sales, which in turn leads to company growth. As 3PLs try to remain competitive in this price sensitive market, providing their clients with leading-edge freight payment services, while reducing internal costs, can be critical to a successful growth strategy.
Back to API News
 | 
