When your company is ready to utilize the services of a 3PL service provider for the logistical and non-asset based requirements for the creation of an additional distribution hub, then it would be a good idea to focus first on companies with whom you already have existing business relations. It is important that the company properly assess the positive aspects of the existing business relations with the Texas Contract Warehouse or California Contract Warehouse. The decision to tap the services of the 3PL service provider is basically a management move to improve upon a current contract. The root of the matter is whether to opt for an upgraded business tie-up with a 3PL service company or go for another service provider to handle the increase in logistics services. Although, there are no hard and fast hard and fast rules governing this kind of business situation, going for an upgraded or amended business relationship with your company’s current 3PL service provider is the more practical approach .

If truth be told, the company may have begun with a typical outsourcing job like getting a contract warehouse just to ascertain the capability and reliability of the 3PL company. Once the performance parameters are met, the company decides on a more complex service contract where non-asset based logistical requirements are included in the business agreement. As a result, the contract warehouse will be run and operated as a distribution hub not by the company staff but by the workforce of the 3PL service company that provides the contract warehouse. The company may include in the outsourcing agreement all related functions like product warehousing, handling, transporting and distributing to retail outlets.

There is a growing trend of more companies who prefer to contract the services of an asset based 3PL company who will not only provide the additional storage space of their contract warehouse but also their experienced personnel of to manage this expanded distribution hub in this particular territory. In this way, a small or new company is able to provide the required capability in response to an increased demand for the company’s product without having to secure extra capital investment.

Once you are able to delegate these responsibilities to a 3PL company, your company will be able to focus all available resources on improving the production end. You will be able to give more attention to the performance parameters in the production of company goods which are necessary by the market that will eventually be delivered to the contract warehouse serving as the distribution hub in the said sales territory.

With 3PL providers delivering both asset based and non-asset based services to your company, hiring and training additional warehouse manpower is handled for you. This is translated to better management of overhead expenditures.

Choosing the right 3PL company is a very serious management decision. If you are contemplating further developing your relationship with the 3PL company sometime in the future, then getting the service of a logistics provider who can deliver both the facilities and manpower should be your best option. With this management decision, you will better meet the needs of your business and respond to it in the most expeditious manner.