What is 3PL (Third Party Logistics) – and how can it help my company?

Third partly logistics (commonly known as 3PL) is a method used in logistics and supply-chain management to outsource part or all of a business’ distribution and fulfillment services. Providers of 3PL logistics act on behalf of a company to receive inventory, ship it to the end consumer, and sometimes handle retail distribution and returns. The 3PL provider makes sure that your orders get where they need to go.

When a 3PL Service Can be Helpful

If inventory management and supply-chain are becoming difficult for your company to manage on its own, a 3PL service may be a great idea. If your business is growing, and inventory storage space is getting tight ‐ or storage costs seem to be higher than they should be, try pricing out a 3PL service to compare.

If your business is starting to grow or spike, it may be beneficial to look into 3PL before you get in over your head. Businesses may see these spikes in advance based on upcoming seasons, flash sales, or large promotions. Contacting a 3PL company to help in these times can help to avoid a major supply-chain headache.

Types of 3PL Providers

When looking into 3PL providers, many companies are able to cover all or multiple of the following aspects of supply-chain management:

• Warehousing;
• Distribution;
• Transportation; and
• Shipping and Receiving.

Some of the larger 3PL firms may be able to look after all of these aspects of supply-chain management for you.

How 3PL Can Help You

Using a 3PL service to automate fulfillment will save your company precious time and money. You will not have to hire staff to handle the shipment of your products, because you will have a partner company whose entire focus is getting the correct product where it needs to go. Overhead costs will go down as less space is required, as well as less staff on hand to handle the products.

If your company is beginning to feel over their heads with supply chain management, a 3PL company may be exactly the answer you are looking for. Third-party logistics can handle one or all of the following: transportation, warehousing, distribution, and shipping and receiving ‐ giving you a chance to focus your energy where it is needed most.