3PL Companies or Third-party logistics, is the practice of outsourcing logistics and supply chain management functions to external service providers2. These providers offer a range of services, including warehousing, transportation, inventory management, and order fulfillment, allowing businesses to streamline operations, reduce costs, and focus on their core competencies.
Third-party logistics (3PL) companies offer a wide range of services to help businesses manage their supply chain and logistics operations. Here are some of the key services they provide:
Warehousing : 3PL companies provide space for storing products. This includes managing the warehouse and inventory control.
Transportation : They handle the movement of products from one location to another. This could involve a variety of transportation modes, including truck, rail, air, or sea.
Distribution : 3PLs manage the process of distributing products to retailers or directly to consumers.
Order Fulfillment : They take care of picking, packing, and shipping orders to customers.
Cross-Docking : This involves unloading goods from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between.
Freight Forwarding : 3PLs negotiate rates with shipping companies and provide documentation for international freight.
Returns Management: They handle the process of managing product returns, which is crucial for e-commerce businesses.
Value-Added Services: These can include product kitting and assembly, product labeling and packaging, quality inspections, and more.
By outsourcing these tasks to a 3PL, businesses can focus on their core competencies and leave the logistics to the experts. It’s important to note that the specific services offered can vary from one 3PL to another. Some 3PLs may specialize in certain areas, while others offer a full suite of logistics services.
How Does 3PL Work?
Instead of managing your own warehouses and doing distribution in-house, you can store your stock in a 3PL vendor’s warehouse, with the stock shipped directly from your manufacturers2. When a customer places an order online, items are then automatically shipped from the 3PL’s warehouse2. Because the process is simple and seamless with a 3PL, customers never think twice about the handoff between received orders and fulfillment.
Role of Technology in 3PL
3PL companies manage order invoices, track packages and keep in touch with consumers — all of which requires a suite of technology1. That’s why warehouse management systems use analytics tools to track labor and inventory in real time, and why artificial intelligence and robots are deployed to speed things up on the warehouse floor.
