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3PL Guide – Where Do Third Party Logistics Companies Fit In?

As the global economy continues to grow, the demand for 3PL companies is also increasing. This is because businesses are increasingly outsourcing their logistics and transportation needs to third-party providers.

So, what is third party logistics? And what is 3PL warehousing? Let’s start with the basics.

What Is 3PL?

A third-party logistics provider (3PL) is a company that provides outsourced logistics services to businesses. These services can include transportation, warehousing, and other supply chain management functions.

What Does a Third-Party Logistics Company Do?

3PLs differ from traditional logistics providers in that they are not part of the business’s core operations. This allows businesses to focus on their core competencies while outsourcing the management of their supply chain to a third party. There are many different types of 3PLs, each with their own area of expertise. Some 3PLs specialise in transportation, while others may specialise in warehousing or order fulfillment. Selecting the right 3PL is an important decision for any business, as it can have a significant impact on the company’s bottom line. When choosing a 3PL, businesses should consider the company’s experience, reputation, and cost. It is also important to choose a 3PL that offers the specific services that the business needs. For example, if a business needs help with transportation, they will want to select a 3PL with experience in shipping and logistics.

What Are the Benefits of Using a 3PL?

The benefits of using a 3PL company are numerous. Perhaps most importantly, it frees up businesses to focus on their core competencies and leaves the logistics to experts. This can be a major advantage, especially for small businesses that may not have the resources or expertise to handle these tasks themselves.

There are many benefits to using a third-party logistics provider (3PL), including:

1. Cost Savings

When you outsource your logistics operations to a 3PL, you can save on costs associated with warehousing, transportation, and staff.

2. Improved efficiency

A 3PL can help you streamline your operations and improve your supply chain management, resulting in a more efficient business overall.

3. Increased Flexibility

A 3PL can provide you with the flexibility to scale up or down as needed, which can be helpful when your business is growing or experiencing seasonal fluctuations.

4. Access to expertise

When you partner with a 3PL, you gain access to their logistics expertise and resources, which can help your business run more smoothly.

5. Improved customer service

A 3PL can help you improve your customer service by ensuring that orders are fulfilled promptly and accurately.
Logistic Services

How Does A 3PL Relationship Work?

3PLs are used by businesses that do not have the resources or expertise to handle their own logistics. Using a 3PL can save a company time and money, as well as improve efficiency and customer service. There are many different types of 3PLs, each with their own specialties and areas of expertise. When choosing a 3PL, it is important to find one that best meets the needs of your business.

A Step-by-Step Guide for Hiring A 3PL Provider

A step-by-step guide for hiring and implementing work with a 3PL provider in a matter of a few simple steps.

  1. The first step is to choose the right 3PL. As mentioned, there are many different types of 3PLs, so it is important to choose one that specialises in the services you need.
  2. Once you have chosen a 3PL, you will need to sign a contract. This contract will outline the terms of the agreement and specify the services that will be provided.
  3. Next, you will need to provide the 3PL with your shipping data. This data can include things like order volume, ship times, and routing information.
  4. The 3PL will then create a shipping plan based on this data. This plan will detail how your orders will be fulfilled and shipped to your customers.
  5. The 3PL will then execute the shipping plan and ship your orders to your customers.
  6. Finally, the 3PL will provide you with tracking information and updates on the status of your orders.

Using a 3PL can be a great way to outsource your logistics and save time and money. Follow these steps to ensure that you choose the right 3PL and get the most out of their services.

Common Misconceptions about 3PL Providers

There are a few key reasons why some companies may be reluctant to use 3PL services. The first reason is that there can be a loss of control over the company’s product. When a company uses a third-party logistics provider, they are essentially outsourcing a critical part of their business. This can lead to problems if the 3PL provider is not meeting the company’s expectations. Another reason why some companies may be reluctant to use 3PL services is because of the cost. While using a third-party logistics provider can save a company money in the long run, there is often an upfront cost associated with using these services. This can be a deterrent for companies who are trying to save money in the short term.

There are many myths and misconceptions about 3PL providers. Here are some of the most common ones:

  1. 3PL providers are expensive.
  2. 3PL providers only provide logistics services.
  3. 3PL providers are not flexible.
  4. 3PL providers are not reliable.
  5. 3PL providers do not have a good understanding of the supply chain process.
  6. 3PL providers only work with large companies.
  7. 3PL providers do not offer value-added services.
  8. 3PL providers are not customer focused.
  9. 3PL providers are not innovative.
  10. 3PL providers do not have a good understanding of the latest technology trends.

Why More Companies Are Choosing 3PL Warehousing

There are many reasons why 3PL is becoming more popular. One reason is that it can save businesses money. When businesses use 3PL, they can outsource their shipping and logistics to a third-party company. This can be cheaper than trying to do everything in-house.

Another reason why 3PL is gaining popularity is that it can help businesses improve their customer service. A good 3PL provider will have a team of experts who can help businesses streamline their shipping and logistics operations. This can lead to faster delivery times and fewer customer service problems.

Finally, using a 3PL can help businesses free up some of their own resources. If a business outsources its shipping and logistics to a third-party company, it can focus on its core competencies. This can make the business more efficient and effective overall.

For these reasons, 3PL is becoming more popular among businesses of all sizes. If your business is looking for ways to save money, improve customer service, and free up resources, then 3PL may be the right solution for you.

The Different Services Offered by 3PL Companies

So, what is 3PL warehousing? And what’s involved in each provider’s individual services?
3PL companies offer a variety of services that can help businesses streamline their operations and improve their bottom line. Here are some of the most popular services offered by 3PL providers:

Inventory Management:

3PL companies can help businesses keep track of their inventory levels and ensure that they always have the products they need on hand. This can help businesses avoid stockouts and lost sales.

Order fulfillment:

3PL companies can handle all aspects of order fulfillment, from receiving orders to picking and packing products to shipping them to customers. This can free up businesses to focus on other aspects of their operations.

Warehousing and storage:

3PL companies can provide safe and secure storage for businesses’ products, freeing up space in their own facilities.


3PL companies can help businesses manage their transportation needs, from arranging shipments to tracking deliveries. This can help businesses save money on shipping costs and ensure that products are delivered on time.

3PL companies offer a variety of services that can help businesses improve their operations and bottom line. Contact a 3PL provider today to learn more about how they can help your business.

Final Thoughts

As the world of e-commerce continues to grow and change, so too do the logistics companies that power it. 3PL providers are constantly innovating and expanding their services to meet the ever-changing needs of their clients.

It’s clear that the future of logistics is bright, and 3PL providers will continue to play a vital role in keeping the wheels of e-commerce turning. Interested in learning more about how third party logistics can benefit your business? Get in touch with One Warehousing today.