Global Logistics Management from a Domestic 3PL

The case for leveraging a domestic third-party logistics provider to manage a global supply chain


It is not unusual for a 3PL to look, act and feel as if it is a global manufacturer. Many 3PLs do business internationally without a brick-and-mortar presence outside of North America or even the U.S. market. For example, EHOB, a mid-tier domestic provider of medical products, uses its U.S.-based 3PL to source inflatable products from the Pacific Rim. EHOB's provider actively develops relationships with overseas manufacturers to create the product and then utilizes its procurement and logistics infrastructure to provide the goods. EHOB simply places orders for products with its 3PL as if it were a manufacturing plant. The provider takes care of the rest. There's no need to have offices in Hong Kong when business can be taken care of from Chicago.

However, just because a company is an international brand does not mean it has to partner with vendors who are as well. Location has little bearing on what kinds of solutions a 3PL can provide for a business. To quote an old adage, "Age is nothing but a number." In this day and age, location is really nothing more than map dot.

Creativity

Without a doubt, every company wants a business partner that offers multiple cost-effective solutions with various methods of achieving exemplary results. The solutions previously described are the result of endless hours of brainstorming and creative design sessions. The beauty of a domestic 3PL's creativity in solving global issues is twofold:

  • First and foremost, 3PLs are an outsourced solution. By their very nature they can run unhinged from corporate allocations, overhead, approvals and other bureaucracy or red tape. This enables ingenuity and fosters the ability to experiment, make mistakes, learn and recreate very rapidly.
  • Second is proximity. A 3PL is close enough to reach, to influence and to be directly involved in the creativity as it happens because it is domestic.

Creativity is especially important during times of turmoil, such as labor union strikes and natural disasters, when supply chains have the potential to be interrupted and may even be expected to come to a screeching halt. It is the duty of a good 3PL to make sure business continues as usual. This is easier said than done, however.


For example, earlier this year in Long Beach and Los Angeles, Calif., there was a possibility of a strike when contract negotiations went past deadline with the ILWU (International Longshoreman Warehouse Union). A strike would undoubtedly affect many supply chains as West Coast ports serve as major hubs of business for global companies. 3PLs worldwide had to devise alternative plans for their customers to keep supply chains moving uninterrupted. This meant time spent on research to determine which routes through alternative ports like Seattle, Vancouver, Prince Rupert, Houston and the East Coast would work best for various clients. Additionally, clients needed to be kept up-to-date on the status of the negotiations and the options available to them in advance of the potential interruption. Ironically, after alternative routes had been determined and clients were made aware of the situation and the recommended solutions from their 3PLs, the strike didn't happen. Shipments went through the southern California ports as planned — however, successful 3PLs were prepared for the worst-case scenario.

Did internationally based 3PLs have the foresight and ability to prepare as domestic 3PLs? Possibly. Did international 3PLs have access to the same information as other 3PLs? Maybe. Did international third-party logistics providers have the creativity, relationships and technology necessary to develop contingency plans that would result in uninterrupted supply chains at a low cost to the customer? It's hard to say for sure, but the majority of domestic-based 3PLs had alternative shipping route recommendations in mind for all clients as soon as word got out about the potential ILWU strike — meaning solutions were provided to clients along with news of the strike and its ramifications in the initial communication.

The most important component of any supply chain is the end user, the customer who demands the goods. Because of consumers, 3PLs are investing time and money into alternative transportation methods, better forecasting tools and reporting methods. This takes quite a bit of ingenuity and is not an easy feat for any company, regardless of location. Without creative quality control procedures and the foresight of a 3PL to know what's to come, any business — from a major retailer to a niche parts producer — could lose money and valuable time.

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