5 Reasons Why Businesses Need to Partner With Multiple Carriers

By 2026, global retail eCommerce sales are expected to be USD 8.1 trillion, and the global parcel volume is projected to reach 266 billion parcels shipped. Such growing demand for online delivery volumes will put tremendous pressure on retailers, eCommerce providers, and D2C brands to cost-efficiently scale logistics operations and deliver on rapidly evolving consumer expectations. 

While investing in maintaining and managing own fleets isn’t a bad option, it’s difficult, if not impossible, to deliver on stringent delivery SLAs and have a healthy bottom line without partnering with multiple third-party logistics (3PL) service providers. In fact, 90% of Fortune 500 companies turn to 3PL providers to help with logistics and supply chain functions. Further, 66% of business leaders increased their logistics outsourcing budget in 2021.

So, why are businesses getting more inclined towards using multiple logistics service providers? Here are five reasons why. 

Five Ways Multiple 3PL Partners Can Help Businesses Grow 

1. Scaling Delivery Operations

To provide customers with an omnichannel buying experience, businesses are increasingly focusing on the convergence between offline and online retail. With online retailing, geographical reach becomes exceptionally critical. Expansion beyond national borders is equally vital while catering to an international customer base that too while ensuring high levels of SLA adherence. With many third-party logistics players available, businesses do not have to limit their playing field just because they do not operate in a region or have a warehouse in the area. With the right tools, businesses can quickly onboard multiple logistics service providers based on their unique business needs and seamlessly seize the opportunities introduced by skyrocketing demands for online deliveries.

2. Moving Beyond Standard 3-4 Days Delivery

The online delivery landscape is highly diverse and has multiple delivery types, such as same-day delivery, next-day delivery, time-bound delivery (2-hour, 90-minute, slotted and 10-minute delivery), and express delivery. While one 3PL partner might not be able to cater to all these delivery types, working with multiple partners enables businesses to do so. 

Businesses can cater to diverse customer delivery demands while leveraging the carriers’ individual strengths. They can choose one carrier for hyperlocal deliveries and another one for same-day or next-day deliveries. 

3. Ensuring Delivery Reliability

Every 3PL provider owns the responsibility to adhere to multiple SLAs specific to the type of delivery they are offering. Thus, this drastically reduces the chances of delayed deliveries during peak hours, seasonal rush, and more.

When businesses are working with multiple carriers, they have the advantage of streamlining the delivery operations for multiple regions. They can minimize the delivery-related risks such as delays by leveraging the other partners’ services in case one of them fails to deliver as expected. 

4. Enhancing Serviceability

Every 3PL provider has its strengths (KPIs that they specialize in), such as same-day deliveries, next-day deliveries, hyperlocal deliveries, less than 45-minute deliveries, slotted deliveries and more. Having multiple partners allows businesses to avail best-of-the-breed logistics services across first, middle and last-mile delivery.

They can also avail of expert and reliable services for critical logistics, such as cold storage movement, hazardous or chemical goods movements, and even critical geography logistics with stringent transportation norms. With a paradigm shift towards sustainability and green logistics, businesses are keen to explore alternative fuels, autonomous deliveries, and other ways to reduce their carbon footprint. Having multiple logistics partners empowers businesses to explore diverse ways to enhance their serviceability in a carbon-conscious manner. 

5. Cost-Efficient Management of Elastic Demand

Events such as sales, seasonal rush, festivals, and peak order hours require a robust and well-planned underlying infrastructure for efficient operation and orchestration. Working with a single carrier means solving such ad-hoc surges in demands by increasing the number of resources, like vehicles or drivers. 

On the other hand, working with multiple carriers offers the benefits such as freelance riders, floating fleets, resource optimization, and vehicle capacity optimization without having to actually participate in core planning. Businesses can leverage these services as and when required without having to necessarily have dedicated resources, such as vehicles or riders.

However, working with multiple carriers is not a cakewalk. It comes with its own considerations, such as regions being catered to, the type of fleet, warehouse requirements, etc. Hence, hiring multiple carriers is just a job half done.

For best results, it is important to manage operations, track performance, rank carriers based on previous performances, and have automated processes for billing, invoicing, etc. This is where 3PL management platforms come into action.

Optimize Multiple 3PLs Using an Intelligent 3PL Management Platform

A smart 3PL management platform can automate carrier selection for specific shipments based on multiple factors, such as performance, cost, delivery speed, shipment value, etc. It automatically records various KPIs based on numerous parameters, such as delivery time, customer feedback, delivery success, etc. 

Such a platform offers 100% visibility into all the 3PL operations across regions. Advanced 3PL management technologies empower retailers and D2C brands to ensure up to 18% reduction in RTOs (return to origin), provide unified customer experiences, shrink last and middle mile costs by 14% and 12%, respectively, boost customer experience by 28%, and much more. 

Hence, partnering with multiple 3PLs to deliver on critical logistics KPIs like profitability, customer experience, and scalability will be the right step forward.