A 3PL (Third-Party Logistics) provider is a partner that assists eCommerce and other businesses in managing storage and transportation of products for sale.
This article covers all the essential information you need about 3PLs, helping you identify the right partner for your business. You'll gain insights into the role of a 3PL, how they enhance your supply chain processes, the functions of a fulfillment center, and more.
A 3PL (third-party logistics provider) is a partner that assists businesses in optimizing their supply chain and logistics operations.
3PLs specialize in various services, including inventory management, warehouse storage, order fulfillment, returns processing, and transportation.
You may come across different terms for 3PL companies, such as:
- Fulfillment company
- Order fulfillment company
- Fulfillment warehouse
- Fulfillment center
Although not all 3PL providers offer the same services, their primary objective is to manage your fulfillment and warehousing needs, allowing you to streamline and enhance your supply chain management.
What Does a 3PL Do?
A 3PL (third-party logistics provider) plays a crucial role in storing and managing inventory, as well as fulfilling orders. By leveraging a centralized inventory and strategic distribution model, 3PLs offer cost-efficiency benefits.
They also handle transportation services, overseeing the movement of inventory throughout the supply chain. This includes coordinating shipments between vendors and customers, optimizing delivery routes, and providing real-time tracking updates.
Additionally, some 3PLs can assist with global supply chain needs, such as import/export and managing customs procedures.
Why Do You Need a 3PL?
For eCommerce companies, partnering with a 3PL can alleviate the operational challenges of supply chain management. By outsourcing inventory and logistics tasks to a 3PL, businesses can redirect resources toward growth initiatives, such as targeting new customer segments or expanding product offerings.
3PL Services
A third-party logistics (3PL) company provides ecommerce fulfillment services by managing logistics operations on your behalf.
Most 3PLs primarily focus on warehousing. These warehouses often serve multiple ecommerce businesses, allocating space for each client’s inventory. When you receive orders, the warehouse staff picks, packs, and ships the products to your customers.
Key Services Provided by 3PLs:
Depending on the 3PL provider you choose, the following services may be offered:
- Warehousing
- Inventory management
- Picking and packing
- Shipping and receiving
- FTL (Full Truckload) and LTL (Less Than Truckload) freight shipping
- Freight forwarding
- Kitting
- Reverse logistics (returns)
Specialized 3PL Services
Certain 3PLs specialize in specific types of warehousing and fulfillment to meet particular product needs or compliance regulations.
- Cold Chain Logistics: Some products need to be stored at specific temperatures, such as perishable goods. Cold chains require refrigerated warehouses and transportation equipment, often referred to as "reefers."
- Hazardous Materials: Products like perfume or batteries are considered hazardous and require highly regulated supply chains. These 3PLs may need staff with specialized certifications to handle and transport these materials.
- Large or Bulky Products: Shipping large or heavy items such as furniture, appliances, and outdoor equipment requires specialized expertise. Not all 3PLs are equipped to handle these products efficiently, so it’s important to select a provider with experience in this area to avoid high shipping costs or damage.
