What Is 3PL Managed Transportation-RXO

What Is 3PL Managed Transportation?

Is your business a good fit for a managed transportation solution from a third-party logistics provider?

If you feel like you spend all your time on logistics and transportation issues, the answer is yes. It’s time to refocus on your core business.

A managed transportation solution is essentially a one-stop-shop created by a 3PL to fit your business needs. You get the benefit of logistical expertise, proven business processes, business intelligence and state-of-the-art technology for transportation procurement. This gives you critical access to drivers, trucks and trailers in tight transportation markets.

Your managed transportation provider will work collaboratively with you to identify ways to take out costs and enhance communication, while minimizing infrastructure investments. The standard offering provides full door-to-door visibility of shipment status, management reports, analysis of shipping patterns and digital scorecards documenting carrier service quality. It can also include freight bill audit and pay services, if required.

RXO’s approach to managed transportation wraps all of these benefits into a centralized control tower that runs 24/7/365.

The Outsourced Managed Transportation Model

Typically, a managed transportation 3PL is a non-asset-based provider of transportation services. The 3PL doesn’t own the equipment or employ the drivers — this is a plus for you, because they’re not constrained by a fixed asset base. They have the flexibility to define the optimal transportation network for your business, using analytical and engineering resources. Their industry connections and carrier selection processes will establish a high-performing, financially stable and cost-competitive carrier base for you.

A managed transportation solution is not “software as a service” (SAAS), although it achieves the same benefits of cost efficiency and flexibility. The difference is, managed transportation adds real value as a fully outsourced solution. A SAAS approach may appear to come with a lower price tag, but the overall value of a managed transportation solution is far greater, considering the depth of experience, service capabilities and continuous improvement it offers. And, that’s before you calculate the cost of employees who must work with the SAAS logistics system.

6 Reasons Why Managed Transportation Is a Good Choice

Minimize Overall Cost

A customized managed transportation solution creates value by optimizing efficiencies and leveraging the experience of seasoned logistics experts. The business intelligence it generates can be used to continuously improve your solution and reduce cost over the term of the partnership.

Take Advantage of Your Partner’s Market Leverage

A managed transportation provider uses a pre-vetted and approved carrier pool, providing access to capacity at the best cost point and service point. Shippers are finding that the current trucking environment can be very challenging, with universal driver shortages and OEM backlogs. An established transportation provider has leverage in obtaining equipment and driver capacity. This can be a huge advantage in keeping your freight flowing.

Elevate Carrier Performance

Without a centralized process for carrier approval and a digital scorecard, it’s very difficult to maintain a high level of service quality or an effective routing guide. A managed transportation solution provides both.

Gain a Technological Advantage

It’s expensive to keep software up to date. Managed transportation automatically keeps you plugged into the latest advances in digitization, automation and standardization, without  the need for special talent.

Get Real-Time Business Intelligence

Managed transportation technology provides tactical and strategic data in real time. You’ll have a personalized dashboard connected to the TMS through an easy-to-use portal. In a non-managed solution, you’ll be responsible for defining and building out your own dashboard — a process that may require a software consultant or an expensive hire. Dashboards can also be difficult to maintain.

Focus on What You Do Best

Outsourcing will allow you to unlock the potential you’ve built into your business, while focusing your resources — talent, capital and facilities — on your core operations, whether it’s manufacturing, marketing or distributing your products. You’ll be in good hands with an experienced 3PL provider. Managing the complexities of a transportation network is their core business, and they know how to do it best.

Learn More

If it sounds like your business could benefit from an outsourced solution for managed transportation, contact the experts at RXO. We can create a customized managed transportation solution that provides the people, processes, capacity and technology required to reduce your risk and keep your business moving.

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