What is a 3PL & How Can They Benefit Your Business?

You may be a relatively new business. Perhaps it has recently grown enough to justify the need for more transportation options. Whatever the reason, if you're looking for a third-party logistics provider (3PL) for the first time, you'll want to have a deep understanding of what they are and how they work before choosing one to help you with your logistics challenges.

So what exactly is a 3PL?

At the most basic level, 3PLs offer logistics service to support certain aspects, sometimes all aspects, of shipping operations. Typically, 3PL solutions provider are integrated into a company's warehousing and transportation procedures.

By scaling and customizing services, 3PLs can better meet your specific needs. It is always up to you how much a 3PL helps. A 3PL can provide a single service for your supply chain or provide a bundle of services that span multiple aspects of your supply chain. These services work with you to provide visibility into all aspects of the supply chain. In addition, leading 3PLs create value in ways that improve end customer, financial, and operational performance.

 

Key 3PL Examples: The Main Features

Transport

When it comes to transportation, 3PLs can hire carriers, consolidate freight for less than a container (LCL) or truck (LTL), track freight payment and insurance documents, and work with private fleets. Working with a 3PL can also help lower your transportation costs while driving efficiencies and developing solutions for complex supply chain challenges. And with connectivity to multiple phases of supply chain operations, 3PL providers can often provide real-time visibility into their inventory while on the move.

Global shipping

Global shipping can be complicated and stressful for businesses. A 3PL can take control of your global shipping lean logistics, such as customs, freight forwarding, and consolidation, to ease the time and money spent on those processes. As a representative of a customer's business, 3PLs also work to enforce that all business compliance requirements are met, costs are managed, and execution proceeds as planned.

Information technology

A 3PL often uses information technology to manage e-commerce, customer relationships, transportation, and warehousing operations. Tools like Electronic Data Interchange (EDI), Application Programming Interface (API), and cloud-based systems are the most popular tools that 3PLs rely on. Regardless of the tool used, the goal is to provide greater visibility into supply chain processes and shipments in transit.

The biggest advantages of 3PL

Working with a third-party logistics provider offers many benefits. Let's take a closer look at the benefits of using a 3PL.

Get experience and knowledge

Supply chain logistics can be complex; Fulfillment, warehousing and shipping come with big challenges. When it comes to supply chain logistics, 3PL organizations are experts and can provide customers with their expertise and connections to quickly streamline processes.

Additionally, 3PLs can provide information on issues that may arise when shipping internationally. Such issues include documentation, customs, tariffs, and different shipping regulations. Working with a third-party medical logistics organization can also relieve the stress of trying to comply with international shipping protocols.

Save time and money

Using a 3PL can potentially eliminate the need to invest in storage space, technology, transportation, and employees to carry out logistics processes, allowing a greater focus on your core competencies.

Additionally, 3PLs can make organizations proactively aware of supply chain errors that could be costly and risky. By providing industry forecasts, 3PLs also help optimize inventory levels and save on inventory maintenance costs.

By working with a 3PL, organizations can also save time by receiving the expertise necessary to carry out supply chain logistics efficiently.

Scale operations and be more flexible

When a business uses a mecial 3PL, it can scale space, labor, and transportation based on current inventory. Additionally, 3PLs can often ease the transition between seasonal periods and industry fluctuation.

By growing in new markets, a 3PL helps growth in new regions. Typically, 3PLs are always looking for ways to improve aspects of supply chains, and therefore have the tools and technologies to make adjustments. Management software can analyze and monitor supply chain procedures to eliminate inefficiencies. Hiring 3PL warehouse near me services is likely to result in continuous improvements in your logistics process.

Final thoughts

Third-party logistics providers can offer expertise, help optimize supply chains, and save time and money. Trusting the experts at 3PL with your shipping logistics can really make a difference in the way your business runs and allows you to focus on increasing your overall value to customers.