Are We Moving from General Logistics Services Providers to More Specialized?
Yesterday we spoke about the rising use of niche logistics providers to allow freight shippers (manufacturers and distributors) to focus on their core, as the niche logistics providers focus on a specific set of processes and strategies, sometimes working with other niche logistics providers, to create effective, and sustainable positive logistics outcomes. Today we will provide a couple of different types of examples of logistics services providers who fall into this niche category.
As a refresher, the example we gave yesterday was that of our very own company, Cerasis, as a niche logistics services provider. Cerasis focuses a lot of our services and technology on effect less than truckload freight management for the North American geographic area. Today we will dive deeper into this thought, as Chuck Intrieri brings us two examples. One involves a great resource help by utilizing labor solutions for the logistics industry and also explaining what is a "Lumper."
As noted yesterday, we are seeing an increase in the use of these specialized logistics services providers as supply chains continue to require more attention and resources to remain effective and competitive in today's fast paced moving consumer economy. In order to do so, this outsourcing of logistics to several providers has proven effective for such companies as McDonalds, 3M, Volvo and more in the fortune 500. However, you don't have to be big to need a specialized logistics services provider. If you have a specific issue that you are not able to handle effectively and scale-ably in-house, with your current resources, outsourcing logistics process and programs to only one specialized logistics service provider can also prove effective.
Springing Up of Specialty Logistics Services Providers: A Way to Get More Labor with Built In Expertise
Sure, you have heard of LSPs (Logistics Services Providers), and 3PLs (Third Party Logistics Providers) but have you heard of the niche service companies, the SLSPs? The Specialized Logistics Services Providers are the new and improved way to insure optimum warehouse and logistics performance through job specialization. Particularly in Grocery Distribution one such SLSP is providing DCs with labor specifically designed and trained to handle grocery and produce, freight receiving, product staging and warehouse sanitation. The company, Warehouse Labor Solutions based in Independence, MO, understands the unique challenges of grocery freight handling and the necessary measures that must be taken to provide the highest degree of food freight integrity. By focusing on grocery freight handling, they bring efficiency, expertise and dependability to each warehouse they provided service for across the country.
The launch of your partnership begins with the Startup Operations Team (SOT) ensuring a smooth transition of their logistics services into your warehouse. Supplier and broker agreements are initiated to establish clear communication lines and direct invoicing, both of which eliminate confusion, decrease dock time and increase the efficiency of your warehouse operations. Most importantly, to safeguard the highest degree of food integrity, each of their professionals possess the Grocery Freight Handling Certification which requires a thorough understanding of USDA guidelines for food warehouses, proper handling of product, and the ability to identify any grocery items of low integrity. Finally, superior standards are maintained on an ongoing basis through their regular management operations reviews.
Another great reason to use this kind of SLSP is to reduce your Workers Compensation cost. They take responsibility for the most physically demanding and dangerous jobs in the warehouse. By delegating these responsibilities to a SLSP's warehouses minimize the risk of injury to their employees and the risk of increased Workers Compensation Insurance premiums and increased experience modifiers that affect your overhead for years. It a great idea to have specialist who are specially trained in the high risk areas to promote a positive culture of safety and reliability that can be infectious throughout the warehouse.
Some of the high risk areas that Specialized Logistics Services provider specialize in are:
- Inbound Receiving and Freight Handling
- Cross Docking
- Pallet Management
- Return Processing
- Down Stacking
- Warehouse Janitorial and Sanitation
- Cooler and Freezer Labor Specialization
They also provide for any other specific need their customer may have for them such as labeling, light maintenance and product clean-up. This is important when time becomes a factor and there are not enough hands to help. Don’t worry, you have a SLSP ready and trained precisely for these tasks.
SLSPs are becoming an integral part of the Supply Logistics Industry by providing precisely what warehouses and shipers need, offering highly trained, safe and responsible personnel who are professional at what they do. Take a look, you will be impressed!
Lumpers: Another Specialized Logistics Services Provider
Lump....what?! "What are Lumpers?" Well....glad you asked.
Lumpers are another specialized logistics services provider. This activity has to do with truck, rail or container loading/unloading services. Lumpers sort, segregate, and palletize inbound floor product and load outbound freight.
The lumping/unloading/loading services are based on production incentive, both to customers and logistics associates. Lumper firms are able to raise productivity by increasing throughput across the dock. They do this by generating faster turn times at the dock door, which reduces the amount of time required to unload product.
Lumping services activities:
- Freight handling
- Flexible labor
- On-site order management
- Customer order auditing
- Special projects as requested by the customer
- Fixed, controllable costs
A single point of contact is always on-site to manage the lumping activity and will be accountable/responsible for their services. Safety is managed by the on-site supervisor in charge.
How are unit prices determined? Typically, the lumped company’s engineering assessment and cost per unit labor model are extremely thorough and specialized to fit the customer’s specific needs.
Pay lump, a special, financial service offers faster and safe transaction for all inbound deliveries with full financial accountability. They specialize in a secure payment center so there is no cash transferred on-site. Or, if it is in an ocean going container, your customs broker can set the payment up where they will pay the fee, and this fee will be billed back to the customer.
Some lumper’s costing model provides a fixed cost to their customers that typically saves the company 5 – 25% in its annual labor expense. It increases output by a similar percentage. There should be no sacrifice in the customer’s current standards in safety, quality and production.
Of course, collaboration and a strategic partnership along with vested interests in the customer-partner relationship will always create success. Don’t build adversarial walls and this partnership will flourish.
A lumping service/unloading service reference is Impact Logistics Services.
Conclusion On Niche or Specialized Logistics Services Providers
There are logistics service providers who do everything out there and try to be everything to everyone, but from our standpoint, we see this happening less and less as specialization becomes very important for companies to make sure they are getting the most of their logistics department to remain competitive. What are your thoughts on the subject? Let us know in the comment section below!
Later this week we will expand on the various TYPES of 3PLs to continue educating manufacturers and distributors on the options available for logistics services to remain efficient and competitive.