How can 3PL providers transform the supply chain?

There is no denying the important role 3PL providers play in the UAE. Dubai is one of the critical nodes of the global supply chain. In addition, it is a primary hub of the global logistics network. Since the United Arab Emirates has developed its logistics market, it has outsourced most of its work. In addition, it lowers costs without compromising the quality of the work. 

It was never more evident than in the past 14 months of the pandemic, as goods continued to get to the right place at the right time. It was essential that logistics continued to function so that people could continue their lives, no matter how disrupted they were.

As a result of a pandemic, companies realized the complexity of the modern supply chain and the need for 3PL providers. No matter the company size, 3PLs, and 4PLs provide technology, capacity, and strategic insights.

What is 3PL?

3PL (third-party logistics) providers offer outsourced logistics services that manage one or more aspects of procurement and fulfillment. 3PL is a general term used for any service contract that involves storing or shipping items. As a 3PL service, a single provider, such as transportation or warehouse storage, can handle supply chain management, or it can be a systemwide bundle of services.

UAE 3PL providers transforming the supply chain

It can be challenging to find a partner who is the right fit for the business. These are some characteristics to consider in logistics service provider partners to transform the supply chain.

Expertise in multiple modes: Multimodal shipping solutions help resolve capacity challenges and meet customer delivery expectations. The full-service Three-party logistics (3PLs) offer a variety of carriers and transportation services that combine to create custom logistics solutions tailored to the business.

Technologies: A 3PL provider that provides a TMS and technology capabilities that can automate and optimize decision-making can be of great value. Pricing may vary according to carriers, lanes, and capacity limitations. The 3PLs should provide live dashboards on pricing and market trends in order to help shippers adjust to rapidly changing market conditions, automate processes, and gain visibility.

Solutions for the supply chain: Assess supply chain risks and develop plans for adapting to them. A 3PL provider with experience in supply chain optimization can refer to other shippers’ strategies and tailor them for an optimized supply chain plan specific to the business. Strategically partnering with the customers gives a vantage point to monitor an entire supply chain. Due to the support of the vendors, inbound freight is handled efficiently and delivered on time. Meanwhile, outbound freight delivers to the customers on schedule.

Transformation of a supply chain: A 3PL’s central role in a supply chain is to connect carriers and shippers. It seems like a simple concept, but implementing it is challenging. It is ultimately important to partner with a logistics company that provides technology-driven and people-powered supply chain solutions. The design should also take the customers’ requirements into account. 

Growth Factors of the UAE 3PL market

Astute Analytica’s report forecasts that the UAE 3PL market will grow at a CAGR of 9% from 2022 to 2030. Government initiatives to promote trade in the country contribute to the expansion of the market. UAE investments in transport infrastructure focus on developing railways, airports, seaports, and technologically advanced infrastructure. 

Furthermore, the UAE government is taking steps to diversify the economy through EXPO 2020, free trade agreements, changing foreign ownership regulations in some sectors, and introducing free zones near airports and seaports to entice foreign investors to establish manufacturing businesses in UAE.

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