3PL (Third-party Logistics): Definition, Why Businesses Should Care, & More
An estimated 60% of the businesses that shut shop during the pandemic are permanently closed. The surviving businesses continue to reel under the growing pressures of lockdown, impending recession, and low consumption.
Some of the worst-hit businesses are small eCommerce businesses, which were operating on shoestring budgets even before COVID19 struck. Now, they need every help they can get to restore normalcy to their operations, keep their costs low, and improve their bottom line.
Third-party logistics (3PL) services are a critical resource available to them. In fact, for some logistics-heavy businesses, 3PL logistic service providers can be a gamechanger.
Here’s everything you need to know about them.
What is Third-party Logistics (3PL)?
Third-party logistics or 3PL is the outsourcing of some or all the logistics operations of your business to an external agency that acts as your fulfillment partner.
Businesses that offer third-party logistics solutions are called third-party logistics providers or 3PL services. 3PL services can take over all the following aspects of your business operations:
- Product Pickup and Packaging
- Shipping and Receiving
- Returns Management (Reverse Logistics)
- Inventory management
- Freight Shipping (trucking) – LTL and FTL
- Customs Brokerage
And much more.
3PL logistic providers offer tailored bundles of these solutions to suit the unique requirements of the businesses.
Benefits of Third-party Logistics: Why 3PL Matters To Your Business?
Depending upon the part of your logistics operations that you outsource, your business stands to realize terrific benefits. In general, 3PL providers offer superior quality of fulfillment services, higher satisfaction to your customers, and drastically reduce your involvement in logistics, thereby allowing you to focus on what you do best – product development, marketing, sales, and other revenue-generating aspects of your business.
Here are other benefits offered by 3PL services:
- Bulk Freight Buying Power
3PL logistics providers work with hundreds of trucking operators and shipping providers. They deal in bulk volumes that allow them to command deep discounts and better shipping prices. A good 3PL provider will help you find better shipping rates than what you can find yourself.
- Seamless Freight Management
3PL providers use advanced freight management software (FMS) that streamline your logistics operations. A full-featured FMS allows users to manage invoices, shipping quotes, custom clearance, purchase orders, sales, deliveries, GPS fleet tracking, customer service, accounting, and a vast number of other logistics-related things, with a few clicks of buttons.
3PL providers bring high visibility and data-driven insights into your operations and even help you optimize them by identifying inefficiencies in your processes.
- Flexibility & Scalability
Ecommerce businesses – small or big – require substantial investments into infrastructure and resources for managing their logistics. However, when the sales are down, these investments offer little value to businesses and continue to add to cost.
A 3PL provider, on the other hand, allows businesses to scale up and down their logistics to suit their evolving needs effortlessly.
- Drive Market Expansion
3PL providers can help businesses serve customers even in geographies, where they don’t have an established presence. The best part? They can do this without requiring you to invest in new warehousing, shipping, labor, or last-mile delivery infrastructure in the new geographies.
Easy Logistics Management offers end-to-end warehousing and logistics services that completely take over all your fulfillment needs while simultaneously delivering a delightful experience to your customers. Get in touch with us to learn more about how our services can drive your growth with
reliable logistics solutions. We have also just launched a whole host of freight shipping automation apps for all major ecommerce and ERP software.