As a 3PL, managing P&L is a game of inches. There’s no room for error when margins are tight, and expectations are high. Although the current market could be a “year to forget for third-party logistics providers,” it should be a time to remember if you’re in for the long haul.
These times build resilience. While the market may be beyond control, a 3PL’s approach to optimizing performance amid uncertain conditions remains firmly within its power through the help of software technology.
3PL logistics software tightens up each part of logistics operations to transform those slim margins into something more substantial over time.
This article demonstrates the value of 3PL logistics software, like MercuryGate TMS, which helps third-party logistics providers boost their overall revenue.
Pressures on 3PL Profit Margins
The costs, risks, and complexity of logistics are why three out of four companies outsource logistics activities to 3PLs. However, 3PLs have to juggle more than the basics to excel. They must deliver exceptional results while balancing cost efficiency, service quality, and flexibility. With market demand constantly shifting, 3PLs must be agile, scaling operations up or down without missing a beat.
But in this balancing act, external pressures can disrupt even the best-laid plans. Factors like rising fuel prices, new regulations, and unexpected delays can quickly ramp up costs, clog workflows, and frustrate customers. That all puts a real squeeze on profit margins.
One strategy to overcome these challenges AND widen the profit margin gap: reduce waste and drive efficiency through the benefits of 3PL logistics software solutions.
3 Ways 3PL Logistics Software Protects Profit Margins
With the rise of e-commerce, logistics providers are delivering freight – and an experience.
Here’s how:
1. Streamlining Operations
In logistics, many repetitive tasks need to be done but don’t necessarily add value. Automating load tendering, tracking, and invoicing activities can reduce errors and free up resources to focus on strategic activities.
Third-party logistics software delivers significant results in this area.
- Time spent on load tendering & carrier management drops by 80%.
- Time spent on freight inquiries drops by 60%.
- There is 75% less time spent auditing freight.
- The cost to onboard carriers decreases by 70%.
2. Reducing 3PL Costs
Global logistics costs will exceed $12 trillion a year in 2025 and account for nearly 10% of the U.S. GDP. MercuryGate TMS users can see over 20% savings through smarter route planning, load utilization, and significant freight and fuel cost reductions.
As highlighted in our white paper, Driving ROI: The Business Case for a Comprehensive Transportation Management System for 3PLs, MercuryGate customers report savings of:
- Over $1 million per year from pool distribution.
- 7% on outbound freight and fuel costs.
- 5-10% on annual freight and transportation spend.
3. Driving Growth
Expenses like fuel, labor, and operational efficiencies create downward pressure on profit margins for 3PLs. Reducing those pressures and increasing the value proposition can expand profit margins by driving growth. InTek Freight & Logistics, a MercuryGate customer since 2006 and trusted reseller, experienced exponential growth of 425% in two short years.
By simultaneously reducing costs and boosting growth, the TMS widens the profit margin and acts as a force multiplier — transforming a narrow margin into a healthy space for profitability.
Building Client Loyalty with Enhanced Service Capabilities
MercuryGate TMS gives 3PLs tools to elevate service with precision, cutting customer response time thanks to powerful control tower visibility.
Calculate your potential Saving While Using an enterprise TMS
Building a Competitive Edge with 3PL Logistics Software
In a crowded 3PL market full of uncertainties, third-party logistics providers need an edge to safeguard and grow profit margins.
Technology like MercuryGate TMS has features that empower your 3PL to differentiate itself through cost efficiency, streamlined onboarding, and insightful analytics. This will ultimately enhance your clients’ satisfaction and enable sustainable growth.
Ready to see your margins grow while simplifying every aspect of logistics?
Request a demo today and start turning tighter margins into wider profits. Test our ROI calculators to learn more about how MercuryGate’s TMS solutions can take your 3PL operations to the next level.
