When to use a third-party logistics company?
3PL means third-party logistics, and they are a basic part of the freight shipping industry. A 3PL takes care of your products, by acting on your behalf to manage the transport and storage of your products. It ships, receives, stores, and distributes them. A third-party logistics provider is not the same as a freight forwarder. A freight forwarder just negotiates pricing, transport options, and routes on your behalf with third-party carriers. They act as an intermediary rather than a logistical supplier. A third-party logistics provider is usually more involved in the physical movement or storage of your items.
The industry has expanded to include a wide range of outsourced logistics solutions for every stage of the supply chain. Shipping, warehousing, supply chain management, procurement, and fulfilment are all handled by 3PLs.
What are the services that 3PLs offer?
Every third-party logistics company has its service offerings. Some 3PL companies have a limited number of transportation and storage services, while others will offer you comprehensive supply chain management, transportation, and fulfilment services. The most common services include:
- Product transportation: 3PLs can handle the transport of raw materials to factories and finished products to warehouses or clients. They may run their fleet and negotiate and arrange cargo through 3PL carriers. In addition, 3PLs can manage and handle freight consolidation plans as well as international transportation logistics, such as import, export, and multi-modal shipping.
- Warehouse storage: Many businesses hire third-party logistics (3PLs) for receiving and storing goods, picking, and packing, order fulfilment, and returns processing. Companies that use a 3PL for storage and distribution can outsource all parts of material handling and fulfilment to their logistics partner, eliminating the need for them to handle their physical goods at all.
- IT services: Advanced software solutions can give more insight into the whole supply chain, customer experience, or physical product movement. These solutions can assist businesses in improving inventory and order management, optimizing transportation routes, managing a just-in-time supply chain, and monitoring costs and performance.
Should I use 3PL services?
3PLs have been around for a long time, but they truly took off in the 1990s. If you’re a big established exporter, chances are you already use one. However, if you are an entrepreneur who is new to freight shipping, you may be thinking if hiring a 3PL for your firm makes sense. Businesses using 3PLs can have the following benefits:
- Optimized shipping, storage, fulfilment, and transport services to meet customer demands
- Capability to expand operations to satisfy demands
- Cost reduction
- Full access to warehousing facilities and other management tools without paying a fortune
Furthermore, 3PLs enable businesses to focus on developing, creating, and selling their products rather than getting dragged down in the unpleasant business of inventory management and cross-country shipping. Working with a third-party logistics company makes a lot of sense for businesses that want to focus on their goods and customers while leaving the logistics process to someone else.