What Is 3rd Party Logistics?

3PL or Third Party Logistics explained

If you’re a retail owner looking to expand your business, then you’ve no doubt heard of third party logistics. But what exactly is third party3PL logistics, and can it really help your business to evolve and grow?

Logistics is the general term given to the organisation and subsequent moving of goods from point A to B.

Third party logistics, often written in shorthand as 3PL or TPL, usually refers to a company that manages a client’s forward supply chain, either a single part of it or the whole procedure from beginning to end. It’s a hugely important part of the global supply network and one that often works tirelessly behind the scenes to ensure customers and business owners receive their packages on time.

Supply Chain Management for your Customers

The services a typical third party logistics company can provide for a business owner include arranging transportation, warehousing and distribution, pick and packing orders, stock management and freight forwarding. There are also other 3PLs who offer additional services such as cross-docking and made to order bespoke packaging for an extra fee.

Some companies have their own transportation and storage facilities, and will take on the role of distributor, while other companies simply provide a management service, i.e. plan and oversee the logistics but use carefully selected transportation or warehouse companies to carry out the actual movement.

Many of the world’s biggest third party logistics providers are flexible to work with, because of the competitiveness in the industry.

Since the 1980s, the total number of third party logistics companies on the market has continued to grow, which has led to fierce competition in the industry and ultimately driven down costs for the businesses that hire them. The original 3PLs pioneered the next-day delivery which has become an industry standard, and something that many customers have come to expect.

At the end of the day, third party logistics companies exist to take control over some of the most complicated steps in the retail industry, leaving clients free to concentrate on other areas of their business, safe in the knowledge that their stock and customer orders are in safe hands.

 

 


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