By Dusty Locke, VP of Operations, Swafford Transport and Warehouse
In 1983, our CEO, Van Swafford, launched Swafford Transport and Warehouse. Starting as a freight brokerage service, the business has evolved into a multiple service Third-Party Logistics provider (3PL).
So, what, exactly, is a 3PL?
A 3PL provides services that allow a manufacturing or sales organization to focus on their core business activities. For example, if your business is great at producing, marketing, and selling a product, that should be your core focus. You shouldn’t start a trucking company to move the product or a warehouse to store it; you should find a 3PL partner to handle those activities.
Transportation is the most basic need of virtually all businesses. As our economy has become more global, the supply chains have become longer and more complex. Whether the source of your raw material is foreign or domestic, your 3PL partner can arrange to have the material picked up and delivered. Less-than-truckload (LTL), full truckload (FTL), and drayage services (moving loaded or empty ocean containers) can all be handled by your 3PL.
Just knowing equipment requirements can be daunting. For domestic product, a 53-foot van (enclosed trailer) or flatbed (no top or sides) would most likely be the choice. For imported product, a wheeled chassis is required. The ocean container is placed onto this chassis with a crane at the port of entry. Once secured to the chassis, a truck will pull the container to its destination and return the empty container back to the port.
Even the chassis are specialized due variations in size and weight of the containers. Containers can be 20, 40, 45 or 53 feet long and weigh more than 50,000 lbs. A tri-axle chassis would be used for heavier containers and a permit might be required if the combination of the truck and loaded chassis exceeds 80,000 lbs.
The type of truck will also vary based on the distance the driver must travel. A truck with a sleeper berth is used for loads that keep the driver out more than one day. A day cab is used for local or regional work that allows the driver to return home by the end of the workday. Your 3PL partner manages these details so you don’t have to become an expert on the transportation industry – and all the specialized equipment and regulations associated with it.
A warehouse or distribution center is another basic need for manufacturers, importers, and sales organizations. If the product isn’t moving directly to the consumer, it will need a storage place until shipment. The size and layout of the warehouse is dependent upon the type of product. Lighter, dimensionally uniform product might allow for a racked storage solution to improve product density and reduce the square footage required. A building with a higher roof could be used to accommodate the racking and a specialized forklift would be used to access the product in the multi-level racking. Heavier, non-uniform product might require a different storage solution because racking might not be an option due to the weight and odd dimensions of the product. Unless you plan to employ an engineer, a real estate expert and a material handling equipment expert, partnering with a 3PL makes a lot of sense.
In addition to storage and distribution, 3PL warehouses offer kitting, sorting, inspection, repacking and other services. Another service 3PLs can offer to importers and exporters is a Foreign Trade Zone (FTZ). The imported goods can reside in the FTZ duty and tax free until they are either converted into a finished product (materials going to a manufacturer) or sold to a retailer or consumer. Companies can better manage their cash flow and react to the seemingly ever-changing tariffs and duties imposed on imported commodities with the help of a 3PL partner who operates an FTZ.
Having a relationship with a reputable 3PL will help you manage and grow your business by allowing you to place your focus where it should be — on your customers, your product, and your services.
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