Logistics is a large component of business for auto parts manufacturers and retailers. However, as the industry has become more complex, many auto part retailers and manufacturers have started relying on third-party logistics providers (3PLs) to simplify their supply chain.
While third-party logistics has worked for some, there are still many challenges that come along with it. Here are the top three issues with 3PL for auto parts.
1) Lack of Inventory Space for Large Inventory
One of the issues with 3PL warehousing for auto parts manufacturers and retailers is the lack of inventory space. As product lines have become more specialized and vehicles have become more complex, the amount of inventory required to maintain an efficient operation has increased exponentially.
Unfortunately, most 3PLs are not equipped to handle the large volume of inventory required by auto parts retailers and manufacturers. The lack of space can lead to significant delays in receiving orders and ultimately result in lost sales.
2) Transportation Hiccups
Another common issue with 3PL for auto parts is transportation hiccups. Due to the complex nature of the automotive supply chain, even the slightest delay in transportation can cause disruptions.
Transportation delays can be disruptive for companies that rely heavily on just-in-time (JIT) inventory management. Even a one-day delay in receiving parts can throw off the production schedule.
3) Costs
While third-party logistics can save companies money in the long run, the upfront costs can be sizeable. To achieve the economies of scale necessary to compete in the automotive industry, many 3PLs require large minimum orders.
The upfront costs can be a barrier for small and medium-sized companies trying to enter the market.
Despite the challenges, many auto parts manufacturers and retailers are still using third-party logistics providers. Instead, companies should consider working with a dedicated partner. At 18 Wheels Logistics, we have the experience and expertise to handle all your automotive logistics needs.
For over 30 years, 18 Wheels Logistics has strived to be the most customer-centric trucking, warehousing, and logistics company around. Based in Vancouver, British Columbia, Canada, 18 Wheels relies on experience and integrity to make customers happy and remain on the cutting edge of shipping and logistics management.
If you have any questions about this article or you would like to talk to us about your shipping needs, please call us at (604) 439-8938.
