3PL stands for “Third-Party Logistics.”
It refers to the outsourcing of logistics and supply chain management functions by a company to a specialized third-party service provider.
These service providers are experts in handling various aspects of logistics, transportation, and distribution. They enable businesses to focus on their core competencies while leaving the intricacies of managing the supply chain to their 3PL partner.
3PL services do vary by provider and may include some or all of the following:
- Inventory storage: Holding products in warehouses, distribution centres, or fulfilment centres.
- Inventory management: Monitoring and controlling inventory levels to ensure sufficient stock while minimizing carrying costs.
- Order fulfilment: Processing and shipping customer orders, including picking, packing, and shipping products.
- Freight forwarding: Coordinating and managing international shipments and customs clearance.
- Freight consolidation: Combining multiple smaller shipments into larger ones to achieve cost efficiencies.
- Transportation: Managing the movement of goods from one location to another, using various modes of transportation such as trucks, ships, trains, or airplanes.
3PL services give companies expertise and resources that can increase the operational efficiency of their business, reduce costs, and increase customer satisfaction.
These services bridge the gap for businesses that may lack the necessary infrastructure, resources, or expertise to manage these processes, plus the complexity of integrating systems with multiple logistics partners directly.
Companies retain focus on core business activities with the confidence that their specialized logistics provider will manage the complexities of the supply chain, from order click to final delivery.
What are the benefits of a 3PL Logistic Partner for Ecommerce Brands?
Here are some of the reasons driving business adoption of 3pl services:
- access to expertise and resources including advanced technology systems, storage and fulfilment facilities, or partnerships with multiple international carrier networks, driving efficiency, flexibility and great sustainability when delivering products to customers.
- saving valuable time and resources to focus on core competencies and strategic initiatives.
- significant cost savings
- avoiding gaps in service during peak demand with scalable operational efficiency
- maintaining consistent service levels that build increased customer satisfaction.
What are the drivers to adopting 3PL services?
Here are some of the reasons why online businesses adopt 3pl services:
- Ecommerce brands must maintain accurate inventory levels to fulfil customer orders in real time to avoid stockouts, overstocks, and lost sales.
- Online brands need to offer a range of competitive shipping options and timely delivery to meet customer expectations and maintain their brand experience.
- Order processing involves integrated order management and Fulfilment technology to receive and process orders, pick and pack product combinations, and generate specific shipping labels for delivery.
- Customer Service to build customer loyalty and satisfaction, backed by timely and accurate responses to inquiries, complaints, and feedback.
- Investing in technology solutions and developing in-house expertise in process excellence takes time and focus form core business development.
- Ecommerce brands partner with a trusted 3PL partner to guarantee fast, efficient delivery of orders, while maintaining transparency in the order fulfilment process, to build trust and loyalty with their customers.