Third-party logistics (3PL) partner

A third-party logistics partner or 3PL is a company that works with e-commerce merchants and business owners to help them handle their supply chain more effectively. Time on operations such as warehousing, inventory management and delivery can be saved by business owner by having a reliable 3PL partner.

Negative impacts are experienced by many companies due to supply chain disruption which can be overcome by working with a 3PL partner as they makes it easy to improve your operational logistics by taking care of warehousing, delayed delivery and poor supply chain management.

The cost and stress of storing products and delivering them to customers can be saved by a third-party partner as it acts as an extra layer to the supply chain. The efficiency of your supply chain can be maximized by identifying and filling up gaps in your supply chain management by a third-party logistics. You only need to receive orders and send the information to your 3PL partner while ensuring it gets to your customers when working with a 3PL partner.

One of the best ways to outsource your logistics needs as a company is to choose a right 3PL providers who are experts in warehousing, packaging, distribution, inventory management and shipping products to customers. The 3PL market is growing with the e-commerce business.

Your 3PL partner can store your products or even the manufacturers can ship to their warehouse directly instead of managing your warehouse. Business owners will be able to take control of operational logistics with the help of 3PL. Transportation and logistics services are provided by 3PL for business owners across different industries. Services like warehouse storage, packaging, truckload shipping, fulfilment and more are provided by 3PL. 

The working of 3PL often depend on the type of company you work with and the type of service you demand from them. A 3PL process generally looks like this:

Some processes involved in 3PL can be skipped depending on the service you need or you can also opt for the combination of all services.

Businesses that works with a 3PL can focus on other aspects of businesses as the stress of supply can be removed. Some of the advantages of working with a 3PL partner include:

Supplying goods to customers is one of the stressful parts of the business. Customers will stop buying from a brand after 1 to 3 supply chain delays, who don't like delayed deliveries. A third-party partner can take care of your shipping and order fulfilment when you work with them. You only need is to send the information to your logistics provider when a customer makes an order, then the item will be shipped from the warehouse to your customers. Your business will grow as the customers will be satisfied when order fulfilment runs smoothly and on time.

International shipping can be simplified by working with logistics services. You should work with a 3PL partner if you are looking to expand into international markets as you can sell your products internationally without worrying about customs and shipping. All will be handled and taken care by your 3PL partner.

It is easier to have your products at a warehouse close to the customers as third-party logistics often have various warehouses across multiple distribution centers. Yo you have nothing to worry about the process as all orders will be processed by professionals with expertise in order fulfillment.

It becomes easier to source goods from different manufacturers and also have different types of goods in the same warehouse when you work with a 3PL partner.

You will be able to save on the costs of warehouse operations when you partner with a 3PL provider as warehouse management services and an extensive network within the logistics sector can be offered by 3PL. They can also offer customers discounts by finding the best logistics deals. Investments on transportation, hiring staff, inventory management, etc. can also be saved by companies when they have 3PL services.

It is easier to solve the complaints of customers and get the goods back on the shelf as returns can be processed seamlessly with 3PL providers.

Companies are allowed to focus on their core competencies by outsourcing warehousing and logistics operations to a third party. The benefits of having a logistics department can be enjoyed without using your internal resources which helps in growth and expansion of your business.

Although there are many benefits while working with a 3PL partner, there are some drawbacks of the 3PL process which include:

 

Generally, companies have little control over inventory stored in a 3PL warehouse when they have 3PL as control of logistics operations are taken by 3PL partner. Therefore, checking for quality control may also get difficult.

Although 3PL is more cost-effective in the long run, a large investment is involved initially as you need to pay for costs like an account set up, logistics costs, warehousing fees, parking fees, etc.

The timeliness of order fulfillment on your side may get affected as a 3PL may have different hours of operation or workflow from yours.

Different kinds of services are provided by a third-Party Logistics providers to help manage the supply chain. Some of the most common services provided by 3PL services include: 

A 3PL partner help companies in transporting goods to customers in different locations by tracking stock levels and ensuring that items are delivered to your customers on time.

Warehousing logistics can be offered by 3PL providers to ensure goods are stored and delivered accordingly. Stock of companies can be managed, inventory can be maintained, and goods can be shipped to customers when needed by these warehouses. You wouldn't have to worry about storing and distributing goods by working with a 3PL partner.

It can be ensured that the customers get their products on time regardless of location by a 3PL provider which is essential for all kind of business.

Distribution services for the wholesale & B2B sector can be provided by 3PL companies. So, it is easier to work on operations like order fulfillment, custom labelling, and so on. Your employees will be able to focus on other aspects of your business by outsourcing these services.

A third-party logistics provider picks up the item and packages it for shippers when an order is placed by a customer.

Freight forwarding services is sometimes provided by 3PL to work on logistics concerns and goods are delivered to customers at the right time. The best shipping routes and modes of transportation are determined by freight forwarders to get goods across to customers. They usually act as a middleman between a company and shipping firms.

Your orders to customers on time by working with different logistics partners. Some companies also have a tracking system in which customers and companies can track shipped items.

Receiving and examining returned goods for damage is involved in reverse logistics. 3PL partner will work on processing the return and putting them back on the shelf for sale if a customer isn't satisfied with their order. A replacement product is also send to the dissatisfied customer if applicable.

There are four main types of 3PL companies. These include:

Standard or Transportation-based 3PL provider generally provides basic logistics services for eCommerce retailers. They are a low-cost option for small businesses as only services like warehousing and transportation are offered by Standard 3PL.

IT infrastructure and management are offered by 3PL service developer. Companies can track their goods and also ensure that the delivery of goods is safe and fast by using their system with this type of 3PL.

The logistics activities of a company is taken over by a 3PL customer adapters per the client's request. The partner just takes over the operations instead of creating their own as the company already has an existing logistics system. This type of 3PL is very expensive as it involves a lot of work and personnel.

Different 3PL services like warehousing, shipping, transportation, IT tracking, cross-docking, etc. are offered by a full-service provider. The warehouse and logistics of a company is managed by the 3PL in this case. This type of 3PL is best suited for large companies that need comprehensive 3PL services as the 3PL providers become the logistics department of the company instead of just offering their services. 

Below provided are some tips to help you choose a right 3PL partner:

You should first figure out if you need 3PL services before hiring a 3PL partner. You need a 3PL partner if 

Control of order fulfillment, transportation, and warehouse management can be taken by a good 3PL.

It is essential to do your research before choosing a 3PL partner along with other aspects of business. Make sure to look out for a company with the right resources as all 3PL partners are not created equal. You need to look for different third-party logistics providers and shortlist those who meet your requirement. Then, you should compare and contrast the 3PLs which you have shortlisted based on quality, price, and services they offer. You need to consider the following things about your 3PL partner to gauge their quality and services:

You should look for companies with reliable customer support as responsiveness and customer service is always prioritized by a good 3PL partner. Find out if the 3PL has a stand-by customer support agent and also determine how fast they respond as you need a company that can quickly address your issues or inquiries.

It is always a good idea to work with 3PL providers who have their warehouses in locations close to your customers. You may be at a disadvantage regarding shipping if your 3PL has a warehouse in a location far from customers. It is easier to get products across to customers if the products are closer to your customers. You can also work with a 3PL company who have a network of conveniently located warehouses to meet your requirements.

You need to determine whether you will be needing a 3PL partner for just one service or a comprehensive service. Find out why you need a 3PL partner and how it is going to help your business. You can make inquiries based on your needed service, once you figure this out.

Finding someone who works only in your industry is essential as specialize in a particular niche is provided by some third-party logistics.

You should confirm if the 3PL can integrate with your existing technology like warehouse management system, order processing software, etc. while choosing one. It could be a great advantage for you if they use something that aligns with your business.

Clear expectations should be set for both of you before hiring a 3PL to make things easy and ensure you are on the same page throughout your collaboration. Your 3PL partner should know your expectation clearly.

Try to find a company that offers good deals by asking how much their services will cost you. Any hidden fees or value add-ons included in the quote must be ensured.