Third Party Logistics Explained

What is a 3PL and why use one?


Provided by an outsourced company, a 3PL offers management of a business’s supply chain, from warehouse to pick/pack, and to shipping to the end user. Third-party logistics is one of the many ways that warehousing services can help business cut costs and become more efficient.


As companies experience growth they often run into challenges meeting the demands of their supply chains and have an increased requirement to focus on their core strengths. Whether it’s assembly needs, kitting, inventory management and storage, contract packaging, or shipping, most companies benefit from having help with these operations.


With access to a 3PL’s network, supply chains can be expanded quickly, efficiently, and in a cost-effective manner. The relationships that many 3PL providers have with their own network can open up many opportunities for companies. This means volume discounts, lower overhead costs, and a timelier service.


A 3PL will have the ability to scale up and down on space, labour, and transportation based on the fluctuation of your inventory. Whether you’re dealing with seasonal inventory or new product releases, 3PLs can help provide adequate space and resources between your busy and slow times, giving you maximum amounts of flexibility during any time of the year.


A 3PL can give you the ability to position your supply chain in markets where you don’t have an established presence. This allows companies to grow in new areas by being able to ship goods efficiently to anywhere in the world. Being able to locate and keep track of products and inventory in a new market without having to spend money on warehousing, equipment, and additional labour can save companies money while giving them the opportunity to strategically position themselves to better serve their customers.


Outsourcing to a 3PL allows your company to leverage supply chain expertise while focusing on your core competencies. 3PL services allow companies and manufacturers to have confidence knowing that all logistics needs are being handled by reliable and experienced professionals, offering faster delivery times and more accurate order fulfilment.


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