Logistics is a complex puzzle that needs time, attention, and room to confirm every little detail. With so many moving parts, you should never feel like you have to handle it without help. Most of the time, it’s beneficial to outsource your logistics services, especially when it will save you time and money. When you let go of the reins, a 3PL provider is here to help. Not sure what a 3PL company is? Find out here.
To be brief, 3PL refers to outsourcing e-commerce logistics processes to a third-party business. This would include inventory management, warehouse management, and fulfillment. 3PL enables e-commerce merchants to save time, save money, and automate their order fulfillment process. While we aren’t sure who founded the name Third-party logistics or 3PL, it became a trend during the ‘70s and ‘80s when companies began outsourcing their inbound and outbound logistics to third-party affiliates.
How it Works
Choosing a third-party logistics company is simple if you understand how it works and what it can do for you. For example, let’s say you are a book publisher, and you hire a writer, an editor, and a graphic designer to produce each book. However, these professionals don’t assist with the consumer ordering or shipment process of the finished publications. To close the gap, you work with a fulfillment center to process any online order and utilize a truck carrier to ship the publications to customers. Both the fulfillment center and carrier act as 3PL providers.
If you choose to not use multiple 3PL providers, there are companies that both do the fulfillment and shipment. For example, Amazon can both fulfill and ship orders purchased through their site.
Advantages of 3PL Providers
Using a 3PL service comes with its own array of benefits. For example, not having to maintain a warehouse, hire staff, or monitor the supply chain is a huge plus. A 3PL takes care of all the logistics—packaging, warehousing, fulfillment, and distribution—which will save you a lot of money in the long run. Additionally, a 3PL can:
Oversee all outsourcing, which will take pressure off the workload in the warehouse or smaller agency.
Generate consistently positive performance results. For example, 3PLs have an impeccable reputation for staying reliable and trustworthy.
Enable flexibility, which will greatly reduce stress for any last-minute shipping orders.
3PL vs. 4PL vs. Freight Forwarding
Surprise! If 3PL is not enough for you, there are 4PL services available! 4PL stands for fourth-party logistics and comes into play when a 3PL provider outsources any of their own contracted services. For example, looking back on the book publisher, if the fulfillment center were to ever subcontract out its shipping to other companies, then it would now act as a 4PL provider.
Another term you may see is freight forwarding, which may be seen as similar to 3PL, but with some slight differences. Freight forwarders don’t ship materials, but they function as a liaison between a client company and shipping firms. The freight forwarder steps in to negotiate prices, determine optimal modes of transportation, establishes economical shipping routes, and resolves any logistical concern. A 3PL offers a broader range of services compared to freight forwarders.
Allow Us to Take Care of Your Freight
You should never feel like you must handle your logistics alone. As a federally licensed, non-asset-based freight brokerage, we are here to help determine the best mode of transport that either you or your clients need. It’s time to take back control of your logistics. Contact us today to learn more about how we can help.