Your business is booming, with so many orders to fulfill, it will soon no longer be an option to do everything in-house. When your business grows, managing your supply chain becomes more difficult and costly; mistakes made in logistics can harm the customer experience, stunt your business’ growth, and eat away at your profits. These problems are often eased by outsourcing fulfillment and logistics operations to third-party logistics companies, also called 3PLs.
What are 3PLs?
Third-party logistics, or 3PL, is essentially a set of services and processes that are provided to a business by an outside company for a variety of reasons, such as reducing costs, improving efficiency, and expanding capabilities.
Typically, 3PL services are flexible and scalable, which means they can be utilized as needed or as a long-term solution, depending on the company’s objectives.
Types of 3PLs
The majority of 3PLs offer a variety of services, though not all specialize in the same things, and some specialize only in one or two areas. They usually focus on one of the following:
Transport 3PLs handle inventory shipments between manufacturers and your warehouse or between you and your buyers. These include freight forwarders that transport large shipments from one country to another, as well as small parcel shippers such as UPS, FedEx, and USPS.
Warehousing, Fulfillment, and Distribution
This is the most common 3PL and provides basic fulfillment services such as storage, fulfillment, pick and pack, shipping and returns. The most common use of these 3PLs is to outsource fulfillment and warehousing. Additionally, these 3PLs manage the seller’s transportation, identify which shippers to use, manage the relationship with the shippers, and optimize the shipping strategy.
Financial and Information
These 3PLs optimize your company’s logistics network by providing services such as accounting and cost control, freight forwarding, inventory tracking, and management, and are typically used by larger enterprises.
Some larger 3PLs offer services in all the above areas for their clients.
How Can My Business Benefit From Working With a 3pl?
Now that you know more about 3PLs, let’s examine some of their primary advantages. The following are just a few of their many benefits:
1. Gain Expertise.
Each aspect of supply chain logistics poses its own set of challenges, such as fulfillment, warehousing, and shipping. By partnering with a 3PL, you learn from their expertise and gain access to their connections.
2. Scale Operations
Utilizing a 3PL allows you to scale space, labor, and transportation based on your industry’s needs. Additionally, a 3PL can help support spikes in sales during the busy seasonal months like Christmas depending on your business.
3. Save Time and Money
With a 3PL, you can eliminate the need to invest in warehouse space, technology, transportation, and additional employees to handle your logistics needs. With these responsibilities offloaded, you can focus more on your business goals.
There is much to consider when choosing a 3PL. A few of the advantages they offer are expertise, streamlined supply chains, and the ability to save time and money. Finding one you can trust is key. By partnering with a proven 3PL, you can make a significant impact on your business and concentrate your efforts on growing your business and increasing your value to your customers. Would you like to hear what 3PL solutions can do for your business? Contact Traffic Data Exchange today!