When we think about the 3PL location, you will have many advantages if the warehouse is nearer to your customer’s location. There will be fewer transportation charges; you will be able to deliver goods quickly and even decrease shipping costs.
In this guide, you will understand how 3PL location impacts your delivery speed and cost and why discovering strategic locations to place your warehouses is crucial.
Why 3PL Location Is Essential?
1. Reduce Transportation Costs
The 3PL warehouse locations determine the transportation costs. For example, if the 3PL warehouse is more proximate to your customers, you can transport them faster and cheaply. Also, having warehouses strategically in ideal locations helps you reduce transportation costs in follows ways:
- It helps decrease fuel costs and delivery duration.
- Fewer delivery delays occur when warehouses are strategically placed.
- Consolidating shipments at nearby warehouses allows for better load optimization.
- Reduce last-mile delivery costs by being closer to the end customer.
- Being near high-demand areas allows for optimized shipping volumes.
2. Quicker Shipping
Do you expect fast shipping when you order a product? According to a survey conducted in 2023, 97% of customers expect faster deliveries within the same day. Therefore, you need to place your warehouse closer to your customers in the correct location. It helps you transport the goods faster and at the right time.
Hence, supplying quicker shipping offers you the following advantages for your business:
- Quicker shipping helps build customer loyalty.
- Decreased shipping duration leads to lower transportation costs.
- Quick deliveries offer your business a competitive edge.
- Improve inventory turnover.
- Faster shipping allows for better response to customer demands, leading to increased sales.
- Proximity to customers helps manage seasonal peaks more efficiently, ensuring timely deliveries.
- Quicker shipping minimizes the chances of product damage during transit, leading to fewer returns.
3. Streamlined Inventory Management
To meet customer demands, you must have the correct product quantity at the ideal location and reduce shipping time. When you have the warehouse in the right location, you can effectively maintain the inventory instead of having all products in one location.
Therefore, your inventory management will be effective, and you can effectively meet seasonal, regional, pricing, promotion, and even product lifecycles.
4. Sustainability & Decreased Carbon Footprint
With a 3PL warehouse at ideal locations, you can reduce the cost and time your products take to travel. Therefore, it helps to reduce carbon footprint and practice eco-conscious best practices.
Here are the key benefits you enjoy in this case:
- Shorter travel distances minimize fuel consumption and carbon emissions.
- Fewer vehicles on the road help decrease traffic congestion and pollution.
- Optimized routes and fewer trips lower the environmental impact.
- Proximity to customers reduces the need for long-distance shipping.
- Better load consolidation reduces packaging waste.
- Shorter transport times allow for eco-friendly delivery options.
5. 3PL Operations Turns Out To Be Adaptable
When the 3PL warehouses are in the right locations, you and your 3PL can optimize business operations and adapt to demands.
For example, if there is a specific issue in a warehouse, only that warehouse will be isolated, and all will function properly.
Therefore, it wouldn’t affect the disruptions, changes caused, or product demands. Hence, having warehouses in strategic locations helps to optimize business operations effectively.
6. Enhance Customer Experience
Having warehouses in strategic locations can enhance the overall customer experience. For example, you can provide faster replacements or refunds if a product has an issue.
What Are The Challenges Of Selecting A 3PL Location?
You or your 3PL may have many challenges when selecting a specific 3PL location. Therefore, it’s essential to consider certain factors before you pick one. Let’s discuss them in detail to help you narrow down your decision-making.
1. Pay Attention To Customer Expectations.
When you manage your business, different customers may have different expectations. For example, certain people may expect free shipping, faster delivery, a cost associated with quick delivery, reliable service, and more.
Therefore, you need to see the customer requirements as an opportunity and manage your customer expectations.
If customers expect faster deliveries, you can keep your warehouses in close proximity to them. This will allow you to meet their expectations.
2. Geographic Location
Consider where your 3PL warehouses are located and how it helps you choose a 3PL. While selecting an ideal geographic location, here’s what you need to pay attention to:
- Ensure warehouses are near major customer bases to reduce shipping time and costs.
- Choose locations with easy access to ports, airports, and highways for faster deliveries.
- Select areas with high demand for your products to improve inventory turnover.
- Ensure the area has a skilled workforce for efficient operations.
- Avoid areas prone to natural disasters that could disrupt operations.
3. Operational Challenges
You may have specific operational challenges based on your warehouse locations. You may need to cover the fulfillment costs, shipping, delivery, staff, etc. Therefore, choosing an ideal 3PL warehouse location will help you overcome these operational challenges.
Some operational challenges you may encounter due to 3PL location are discussed below:
- Increased shipping costs due to remote warehouse locations.
- Longer delivery times impact customer satisfaction.
- Labor shortages in areas with limited workforce availability.
- Inventory management issues due to poor infrastructure.
- Higher overhead costs in certain regions, like rent and utilities.
4. Cost Considerations
When choosing a warehouse center, consider the associated costs. You need to ensure you can afford it. Here are the key cost considerations you want to pay attention to:
- Warehouse rent
- Labor costs
- Transportation costs
- Utility costs
- Inventory storage fees
- Technology and equipment costs
- Tax implications
- Insurance costs
What Are The Benefits Of Choosing An Optimal 3PL Location?
Even though choosing an optimal 3PL location is a thoughtful decision, you can enjoy many benefits if you do it carefully. They include:
- Reduced shipping and transportation costs.
- Faster delivery times and improved customer satisfaction.
- Better inventory management and turnover.
- Access to a skilled workforce for efficient operations.
- Scalability for future growth and expansion.
- Lower operational and overhead costs.
Final Thoughts
As discussed above, finding the strategic 3PL location of your warehouses will help you optimize costs and delivery speed. By following the above-mentioned strategies, you can effectively reduce overall operational costs.
If you want to find the ideal 3PL provider with warehouses in your required locations, we can help you find them. All you need to do is contact 3PeeL to help you match the ideal 3PL provider.
