By Karen E. Thuermer, AJOT Few sectors in the logistics field have experienced so much growth during this extensive economic downturn than that of third party logistics operators (3PLs). Perhaps that is because this industry has adjusted with the times. With companies scrutinizing every penny of their processes, many have turned to 3PLs to cut costs and find innovative ways to manage their supply chains. “As companies experience greater challenges within the supply chain environment, mainly to improve total costs, they are increasing collaborating with the 3PL marketplace,” says Dino Moler, executive vice president of client solutions for LeSaint Logistics, a 3PL headquartered in Romeoville, IL, that has 14 facilities across the United States. Whereas many companies over the years have added logistics functions to their internal operations to take control of their businesses, many have also found that supply chain management can be time consuming and complicated, say nothing of the expense of paying for warehouse space if that were a part of their business model. Then there are the import/export regulations, transportation costs, the question of how much product should be warehoused as inventory—where and when, and whether or not shipments should be sent direct, thereby bypassing warehousing altogether. Even labeling concerns for this and that market and packaging can become issues that need to be addressed. “Companies began to realize they could see savings if they could employ a company that could analyze how much inventory was tied up, and the mode of transportation they used,” reports Steve Bullard, vice president of logistics services, Pilot Freight Services, Pilot Freight Services, a full-service global transportation and logistics company headquartered in Lima, PA. Many also realized that they do not want to invest in warehouse operations because of changing business models and the fact they could be stuck with warehouse assets. “The elimination of warehousing allows companies to be nimble and flexible. That’s the speed at which business happens now,” Bullard says. Roots Redux For years, companies that did their own transportation and distribution – particularly those in the retail sector – regarded these functions the “evil step child” of their business. “Merchandising was the king,” emphasizes Andy Miller, president of Retail Supply Chain for Performance Team, an asset-based 3PL headquartered in Santa Fe Springs, CA with eight domestic hubs, 5.1 million square feet of warehouse space, and a fleet of over 350 trucks. “No one understood the relevance transportation and distribution had to the bottom line. But now they see how speed to market and keeping a lower inventory on hand are things that can make or break a company,” he adds. Consequently, many companies are opting to go back to their roots and focus on what they do best: manufacture and sell products. “They have found that investments in intellectual and physical capital is better served within their marketable product or service, ultimately allowing 3PL’s a expanded demand for supply chain services,” Moler remarks. In fact, companies that employing 3PLs find that they seamlessly become extensions of their customer services capabilities and manage their logistics requirements. “3PLs save time and money, and allow companies to concentrate on their own core business,” comments George Abernathy, president of Logistics at Transplace, a Dallas-based 3PL and technology company with operation centers in Laredo and Monterrey, and Lowell and Stuttgart, ARK. “From manufacturing to retail to chemical, Transplace has many new customers turn to us for help in managing their logistics,” Abernathy adds. In the retail world, the wakeup call came when companies realized that the price of a product and labor were retailers second and third largest expense. “Speed to market and keeping low inventory are what make and break retailers today,” Miller says. After all, mistakes or mis