A Capacity Crunch refers to shippers having access to fewer containers and freight options to their export destinations due to lower availability from shipping lines. Globally, this has occurred due to the economic stress, forcing shipping lines to reduce the number of vessels and alter shipping routes based on demand.
2018 is predicted to face some of the worst capacity crunches and logistics and shipping organizations need to be well prepared to address it with grace. 3PL or third-party logistics and freight forwarders are the best solution providers in this scenario and create a buffer between the Shipper and the Shipping Lines to mitigate the risks associated with Capacity Crunch.
Network And Carriers
3PL providers have a vast network with expanded shipping route knowledge; and applying it according to the deadline provided by the shipper is the challenge. An innovative approach to shipping and delivery provides 3PL companies an opportunity to fulfill the requirement by using various combinations of delivery options.
During a Capacity Crunch, it is essential that all the paperwork is completed in the fastest possible time to avoid cut-off times while at the same time ensuring that the accuracy of the information is upheld. An efficient 3PL does the entire documentation process at one point and improves the convenience to the customer.
Temporary Storage Facilities
Sometimes, a capacity crunch means that cargo must be stored at or near the port for short duration to enable quick loading and turnaround time. When you outsource the logistics to a 3PL, they usually can arrange temporary storage facilities for the cargo at low costs and ensure that the material is kept in a safe and secure manner. It saves a lot of time and reduces the stress levels at Shipper end.
Ease Of Scaling
3PL functions as pay-as-you-go solution for Shippers. They assist in warehousing, documentation and transport of material; and because the investment is their own, it allows for the shipper to focus on their core activities. Investing in 3PL is comparatively inexpensive than storage upgradation or shipment improvisation. It allows the shipper to scale the business at their own pace and allows for expenses to be directly tied to volume without adding to the fixed costs.
When there is time pressure, there will be sheer pressure on every employee at each level of the supply chain. The bottleneck at warehouse level is managed more effectively by 3PL as they have the expertise and skill required to effect fast loading/offloading of containers to ensure time deadlines of the shipping companies. 3PL saves the time and lets shippers concentrate on sales and marketing.
To sum it up, a 3PL can be all in all solution for most logistics woes, especially during times of Capacity Crunch. The resource and time saved by investing in them can be used by a company to improve their own strategies and operations and ensure that delays and delivery are mitigated at the lowest possible expense.