Blue Collar White Gloves kind of 3PL

I have recently had a number of conversations with clients and some client prospects about what we do and what in particular makes Gateway different from some of the other transportation related companies they have dealt with. In the business of supply chain and distribution services Gateway O.T is considered a Third Party Logistics company or 3PL.

When I am asked what king of 3PL we are I answer: "Blue Collar White Gloves" to reinforce our company moto “We ensure shipping success”. It’s in the way we ensure this success that differentiates us from other 3PLs. We are a hands on company. Gateway can pick up, warehouse, pack and deliver your goods. This is actual blue collar work that a lot of the other 3PLs don’t offer.

As a U.S Air Force veteran I know the term Logistics was first coined in the military, but the specific term 3PL began in the 70s and 80s when manufacturers and wholesalers started “Outsourcing” some or all of their supply chain needs.

By utilizing a 3PL, these companies learned they could leverage the transportation and warehousing expertise the 3PL offered to reduce their costs and stay up to date on laws, regulations and procedures that affected their items when in the public domain. A cost effective strategy when the 3PL has a team of people rather than a company hiring individuals with each particular expertise they may need.

The 3PL Sector has continually grown over the years, so much so that today there are many types of 3PLs. In this blog I will just discuss 3 types: Asset based, Non Asset Based and Asset Light.

Asset based 3^rd Party Logistics companies are those that may own a fleet of trucks or intermodal containers or a warehouse. Their focus is on filling their trucks, containers and warehouses with the goods of their clients and creating operation efficiency using their infrastructure and assets.

Advantage: If your company uses an Asset based 3PL you have direct connections and control with those operating the equipment or facilities.

Disadvantage: Your Company may not have access to the most efficient and cost effective way to manage your products, a different carrier or warehouse may be more suitable than what the asset company has available and furthermore could be at a much lower price.

The biggest growth in logistics over the last 10 years has been the Non-Asset based sector of 3PL. These are freight brokers. Companies that manage distribution for their clients through improved process and communications systems. The advantage of a non-asset based 3PL is that they provide their clients with a way to manage their distribution using a multitude of asset based companies.

The proliferation of these 3PLs was brought on by the growth of the internet. These 3PLs put a lot of resources, time and money into computer systems that help manage the distribution of products for a company. Offering Transportation Management Systems (TMS), Warehouse Management Systems (WMS), RFID and EDI connectivity providing these tools over the internet to their clients.

Advantage: Your Company has access via computer or phone to a plethora of cost efficient freight and warehouse management services saving you time and money.

Disadvantage: limited direct control for your company over asset utilization. Non Asset based 3PLs own no trucks, no warehouses and you manage your distribution through their managers.

The final segment of 3PL service providers is called the Asset Light 3PL. Gateway O.T is considered an asset light company. Asset light companies are a combination of the 2 above. They own actual physical supply chain assets like warehouses, forklifts, trucks and vans and actually perform the Blue Collar and White Glove services using their assets and manpower but they also partner with other 3PLs to provide the most comprehensive and cost effective end to end supply chain solution.

Advantage: This flexibility gives your company access to both assets and a network of other assets to provide the most efficient and cost effective means of managing your supply chain. This model provides you with a one stop shop of both assets and brokered assets.

Disadvantage: Your Company needs to do its homework to find out which 3PL asset light company can offer the best value and needs for your particular supply chain strategy.

With a brief understanding of these 3 types of 3PLs it is important to understand what exactly you need for your business.

I was talking to a gentleman the other day who was explaining how easy it was for large corporations, who have tons of resources available to them, to manage freight compared to his rather small company. He said "no large company would do anything but go direct with asset based companies and get the job done and they can eliminate the middleman!"

He was surprised when I told him how many Fortune 100 companies utilize 3PLs and was shocked to learn that the big guys don’t use just one. GE, Unilever and Proctor and Gamble all use over 30 3PLs, actually one of these companies uses over 50 different 3PLs. I worked for a number of years in the Lowes supply chain and utilized over a dozen 3 PLs as well as contracted directly with asset based companies in warehousing and transportation.

My company, Gateway O.T prides itself on offering our customers Blue Collar White Glove services. The reason we can “Ensure shipping success” is because we actually handle the freight. The Gateway Crate and Freight team provides professional packing, crating, pick-up and delivery services as well as most supply chain value added services…we are hands on.

The differentiating factor that I have to explain to clients is that although an online non asset based 3PL appears big, has a great online presence and user interface and offers huge discounted rates does not mean they can handle their particular job best.

I won’t knock Non-Asset based 3PLs…well because they are clients of ours…they hire us all the time to do the work they don’t do. We have done pickup, delivery and crating services for a few of the larger 3 PLs and we love the work. We have, on occasion quoted out jobs to customers who have then decided to go with the larger online company who then turn around and hire us to do the job.

The bottom line in Logistics, and I have managed logistics in the military and at large global corporations as well as at smaller companies is-know what you need.  Do your research, ask the right questions and make the decision on what kind of 3PL can best serve your needs.

Gateway O.T is a Tempe, AZ based 3PL who performs blue collar, white glove services for their clients.