3rd Party Logistics Warehousing for Startups: Why Los Angeles is the Perfect Fit

Los Angeles is one of the nation’s entrepreneurial hubs. 

According to The Economist, the city ranks third in the country for startup activity, behind only San Francisco and New York City. E-commerce startups, in particular, are thriving in the City of Angels. The website Built in LA, which shares news from the tech industry in LA, includes profiles from 904 southern California-based e-commerce companies. 

This, perhaps, shouldn’t come as a surprise. E-commerce companies are laser-focused on mastering logistics. LA’s proximity to major ports and transportation networks makes it the perfect spot for startups to set up shop. 

Let’s dive a bit deeper. 

From the Port to Your Doorstep

Many e-commerce startups rely on goods imported from overseas. Getting these goods from a container ship to their customer’s doorsteps can, however, be a challenge. 

The first question that must be addressed is where the items should be stored until they’re included in an order. Most startups have limited resources. Renting out e-commerce warehouse space isn’t an option for most startups focused on optimizing their logistics. This is where Los Angeles’ status as a hub for e-commerce startups comes in handy. 

Throughout the region, there is high demand among companies – both small and large ones alike – for storage space. 3PL providers have responded by creating services for e-commerce startups. Because of the high demand, competition among 3PL providers is fierce, and many have innovated their services to stay ahead of their competitors. 

Here are a few of these innovations:

Cross-Docking

As mentioned earlier, nailing logistics is a top concern for every e-commerce startup. With cross-docking, shipments retrieved from either of southern California’s ports are transported to a nearby warehouse facility, unloaded by warehouse employees, and then immediately placed on an outbound truck. It’s a service seemingly designed for e-commerce startups facing near constant customer demand. 

Month-by-Month Leasing

Many third-party logistics providers in the Los Angeles area, like Cummins Transportation, have moved away from locking clients into annual contracts. Instead, companies can make adjustments monthly based on their changing needs. This is especially important for rapidly-growing e-commerce startups since demand levels can quickly rise and fall, which can make logistics planning challenging. 

Inventory Management Software

Most Los Angeles e-commerce startups purchase software subscriptions to streamline tasks such as project management, marketing, and sales. The costs of these subscriptions can add up. Fortunately, many 3PL vendors are footing the bill for the inventory management software that e-commerce startups need to do business. This software offers real-time visibility into inventory levels, which provides e-commerce startups with the insight they need to know if they can meet current and future levels of customer demand and decide when to reorder items. 

Setting Up Shop in SoCal

If you’re a newly-launched startup in need of logistics support, Cummins Transportation can help. For more than 45 years, we’ve helped southern California businesses master the art and science of logistics within the region. We offer cross-docking services, month-to-month leases, and access to our cloud inventory management software. Talk to an expert today!