Third-party Logistics (3PL): The Daily Definition

 In Inventory Management, The Daily Definition

What are third-party logistics?

Third-party Logistics (3PL)

Third-party logistics, or 3PL, is the term used for when supply chain logistics are managed on behalf of another business. How a 3PL service functions will vary according to the needs of the client. A 3PL service could operate as a fulfillment services provider or as a managed warehousing facility. 

An example:

If you’re a growing business suddenly faced with the need to quickly establish more transportation or warehouse management processes, a 3PL service might be the perfect fit.  

Instead of you or your employees digging in to establish how you’re going to ship your goods, or how your warehouse needs to function in order to fulfill your orders, a 3PL service does that for you. This leaves you with more time to focus on growing your business even further.

Hiring a 3PL service can be a good way of guaranteeing that your supply chain is managed by seasoned professionals who know what they’re doing. These businesses specialize in creating seamless shipping and warehouse management services. They can make a huge difference for companies who need them.

Our two cents:

Supply chain management is a fine art. And depending on the size and scope of your business, simply layering shipping-specific functionality into your ERP solution might meet your needs. 

However, it’s easy to quickly lose yourself in the weeds when wading through the realities of supply chain logistics. Maybe your company has several warehouses in different states. Maybe the products you sell have special shipping requirements that hard to meet. Or maybe there’s customs paperwork involved that you’ve no experience with. This is where third-party logistics (3PL) services come into play.

Take a deep dive into your current supply chain management. Are you losing money due to shipping errors? Do logistics complications leave you scratching your head? Are there outside factors that complicate resolving these issues yourself? Third-party logistic services can help.

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