In the industry, they call them 3PL – 3rd party logistics businesses that stay in business to help take logistics and operation- related headaches off the hands of all kinds of companies. Come to think of it, you could say that Shore Porters was a well-thought out 3rd party logistics company. But there are other kinds too.
Some of them completely take warehousing and other business-related handling problems off their clients’ hands. What exactly does it take to set up a third-party logistics business of your own?
You can’t just go and set up a generic logistics operation without thinking about the exact niche you’ll cater to at first, of course.You will need to think through the kind of service that you will provide, the kind of industry that you’ve will serve, the side of business you will be willing to take on, and so on. A lot of that comes down to how much experience you have. How much capital and you’re willing to bring to the table is the other thing.
A good way to go about it at first would be to start small and cut one’s teeth on a small client whose business won’t crash and burn should you screw up. Study how the large third-party logistics businesses operate for success, and you find that their clients often switch from one provider to another quite regularly. There’s always something. Logistics can be a very complicated kind of business. Failure is frequent. When it happens, your clients fire you. Basically, you need to make sure that your business stays away from letting the client down as far as possible.
What you need is a clear vision of how your logistics operation will do this. You need to plan this out ahead.
Your first step would be to write out operating procedures for every single task and process that all keep your company running. You need to mentally go over how every person at his desk doing his job will look at what’s before him. You’ll need to anticipate everything he’ll need and write it into your plan. Anything that doesn’t him seem clear, you need to completely sort it out. Even if it seems like a small problem on paper, you can be assured that it’ll be a really huge deal when things are actually tried out in the real world.
You’ll need to study every single business whose logistics you plan to take care of, talk to professionals engaged in the industry to see how they view third-party logistics providers, and so on. You’ll have to write down the kind of standards you expect your services to match and find out how you’ll actually get there. And finally, you have to learn how to do this to a price.
Basically, if you want to get into third-party logistics, you’ll have to make like Abraham Lincoln said he would – given five hours to chop down atree, he said he would spend the first four-and-a-half hours sharpening his axe.