Outsourced Logistics for Illinois Manufacturers
Roughly 71% of goods in the United States are moved by trucks. And in spite of a freight spend that could be one of a manufacturer’s largest budget items, logistics departments are often understaffed and suffer from high turnover rates, managed by employees with limited transportation knowledge. Too often manufacturers are wary of outsourcing their logistics services, operating under an outdated belief that all business functions should be handled in-house. This is short-sighted.
A report from Armstrong & Associates, a supply chain consultancy group, indicates that 90% of Domestic Fortune 500 companies rely on third party logistics (3PL) providers for supply chain and outsourced logistics services. Chairman Dick Armstrong explained that size was a good predictor of which companies would take advantage of the cost savings and increased efficiency offered by 3PL services–with larger companies more likely to partner with one or more 3PLs for outsourced logistics.
But what about smaller companies? For small to mid-size manufacturers in Illinois, the benefits gained when logistics services are outsourced may be even greater. Because supply chain management is eating up a greater portion of both costs and manpower, outsourcing these functions allows company executives to focus on growing business instead of educating and training employees to handle the myriad aspects of logistics operations. Organizations who outsource their logistics operations find they are better able to allocate limited resources.
When Illinois manufacturers partner with experienced logistics professionals they access the most innovative technologies and processes. When they partner with regional freight brokers, the advantages expand exponentially.
These benefits include:
- Advanced location knowledge–Chicago is one of the freight capitals in the world. When you work with a 3PL in Illinois you gain the power of insider expertise in a rapidly growing and changing market. Given Chicago’s volumes, smart manufacturers will partner with experts who have specific knowledge of how that market works.
- Cross-trained logistics experts–Here at AM Transport Services, we’re a small, regional broker. Our logistics professionals work from the same office in southern Illinois. Because we’re not large, the people on our teams are trained in all aspects of the logistics business. That redundancy means your freight will never fall through the cracks.
- Reduced risk–Federal and state regulations change on what seems to be a daily business. This leaves manufacturers open to excessive liabilities if they aren’t partnering with a 3PL with expertise and training in this area.
- Technology–Operating with a truly innovative and scalable Transportation Management System (TMS) is a must for any growing business. However, most manufacturers do not have the time to study the technology or to implement it to their advantage. A skilled 3PL, like AM TransportServices, will offer a cloud-based system offering flexibility, security, and accessibility. But that’s not all–good data is imperative to growth, and a TMS should also offer relevant and move-the-needle reports.
- Premium carriers–Perhaps the most important benefit you receive when you work with a smaller local freight broker is access to superior carriers. Here at AM Transport Services, we’ve been in the logistics business for over 33 years. During that time, we’ve cultivated long-standing relationships with the best small-to-midsize carriers in the midwest. These are carriers you will not find on your own. They have long business histories, excellent safety records, and low driver turnover.
Heading into the future.
As technology, data, risk exposure, and regulatory needs become more demanding, manufacturers will find it necessary to turn to experts for both protection, as well as, added advantage over their competitors. Without this expertise, manufacturers will fall behind, or worse yet, close their doors. Those who choose to outsource some or all of their logistics operations will outpace their competitors in the near future.