6 Things to Consider When Creating a 3PL Business Plan

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Are you thinking about operating on a third-party logistics (3PL) level? As a growing business, you can no longer look to handle all of the heavy lifting on your own, you need a 3PL Business Plan. On one hand, it’s good that you’re growing big enough to need to outsource your materials and fulfillment requirements to someone else. On the other hand, mastering the techniques needed for a successful 3PL business plan is not for the faint of heart. With so many options out there and so many routes you can take with third-party logistics, it’s easy to get mixed up. That can lead to consequences you don’t want to deal with.

Luckily, creating a 3PL logistics business plan isn’t as difficult as you might think. This article goes into a few things you’ll want to consider when you create your logistics plan. Read on to find out more!

1. Communication Is Key

One of the first things that you’ll need to realize with logistics is that communication is an absolute must . No matter which company you decide to go with, you have to make sure you stay in constant connection with them to ensure your items are distributed properly and on schedule.

Make sure that you also relay to those involved that you’re only giving them the right to handle the physical items of your product. Miscommunication might have them believing you gave them the responsibility of managing your actual business.

2. Develop a Plan

Now that you know the importance of communication, you now need to start putting your logistics planning together. You’ll need to start by creating a project plan that details the overall objectives that you want to be accomplished.

This includes several factors, including detailing the start and end dates of the project, who is responsible for each task, and any costs that are associated with completing the task.

Make sure you coordinate the plan with all parties right from the beginning to ensure the maximum chance of success.

3. Select a Full-Time Project Manager

There’s no doubt that your 3PL plans will end up being too much for you or anyone in your company to manage part-time. However, you don’t want to relinquish control over the project to anyone outside of the company, as they most likely won’t be able to carry out everything you need to make sure the job is done flawlessly.

With this being the case, you’ll want to go for a third option: finding someone in your company that can take on a role full-time as your project manager .

When choosing a full-time manager from the inside, they would need to understand the nuances of fulfillment. They will also need to have a firm grasp on responsibilities such as marketing, merchandising, and inventory control, as well as show leadership skills and a good grasp of communication.

4. Keep an Eye on Your Stock

It’s easy to be so worried about moving stock that you accidentally forget about the stock that you do have. One of the biggest challenges is making sure you produce many goods that can keep up with how many you sell, so keep an eye out on things before you find yourself out of stock.

It’s also a smart move to go through your current stock and evaluate the inventory. Selling aged or dead stock is a bad look on your company, and you’ll want to avoid wasting money and degrading your brand by removing them.

5. Make Sure the Logistics Company Can Scale to Your Needs

Contrary to popular belief, businesses are not built through consistent growth. Rather, their scaling happens through a constant fluctuation, with changes happening depending on the needs of the company at a particular time.

With that in mind, you’re going to want a logistics company on your side that is willing to move in the manner that you do. A professional logistics team has the skill to be able to adapt to your demands so that both they and you can continue to provide goods to consumers on time.

6.Continue to Stay Actively Involved With the Work

When you’re in the middle of a 3PL logistics business plan, it’s easy to become passive as the third-party company continues to provide good results. However, sitting on the sidelines is the last thing you want to be doing.

The way that 3PL works can easily cause this to happen. By default, the nature of a third-party logistics company gives them more influence over how your customers view your brand than you do.

That said, you’ll want to make sure you constantly stay involved in what you want to see accomplished. Being assertive with your wants is key to making sure your chosen logistics company will continue to do what you need to help your business continue to prosper.

Let’s Make Your 3PL Business Plan a Success

Now that you know how to create a 3PL business plan that fits the needs of your business, you’ll be able to manage and fulfill your company’s needs without a problem. That said, you want to make sure you deal with a distribution team that can deliver the results. We’re the right ones to help you out.

At Quality Warehouse, we know the importance of high-quality 3PL services, and we make sure to offer our best to our clients. Whether you have warehousing needs, importing and exporting requests, rail siding services, or a combination of things, we’ve got you covered.

Ready to get started? Be sure to have a look around our site to find out more about what we can do for you, or reach out to us whenever you’re ready to get started. We can’t wait to help your business be the best in the industry!

Call 732-476-3170 now to learn more about how Quality Warehouse can help store your goods in New Jersey!

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Guide to third-party logistics (3PL)

This guide will give you everything you need to know about third-party logistics (3pl) – so that you can decide if your business would like to partner with a 3pl provider..

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Introduction

To survive and thrive in today’s business world, you must be able to deliver whatever your customers want, whenever and wherever they want it.

Indeed, rapid and reliable order fulfillment is the key to ensuring customer satisfaction and bottom-line growth for companies of all sizes, across all industries.

However, as your company evolves and expands and as business conditions fluctuate, you may find that it becomes increasingly difficult to manage your warehousing, inventory, distribution, and fulfillment processes – which can become a source of operational headaches and soaring costs.

Additionally, your team may prefer to focus on their core competencies – such as product development, sales and marketing, or customer support – rather than devoting all their attention to the complicated, time-consuming task of fulfilling customer orders.

For these reasons, many companies look to external experts – third-party logistics (3PL) providers – to help them handle their end-to-end logistics operations. A recent study revealed that 86% of US-based Fortune 500 companies use 3PL providers for various logistics and supply chain functions.

A growing number of organizations across various industries are discovering that outsourcing their warehousing, inventory management, and order fulfillment to a 3PL can have many business benefits such as improving customer service, operational efficiency, profitability, and market share.

The question is: Should your organization work with a 3PL provider?

In this guide, we will give you all the information you need to know about 3PLs – so that you can decide if would like to partner with such a provider and, if so, you can choose the right 3PL for your business.

Some 3PLs offer a complete suite of integrated, end-to-end logistics solutions, while other players specialize in specific areas or industries.

Most 3PLs can deliver a variety of logistics solutions – and each company can pick and choose which solutions they want, customize those solutions to meet their business needs, and change, adapt, and add solutions as their business scales and grows.

The array of solutions that 3PL providers offer includes:

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Partnering with a 3PL provider can deliver many different business benefits and can help fuel your company’s long-term development. Indeed, by outsourcing your warehousing, inventory management, and fulfillment operations to a 3PL, you can:

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  • Shipping speeds, with some best-in-class 3PLs delivering orders as fast as one day.
  • On-time delivery rate, with the top performing 3PLs achieving rates of greater than 97% in this area.

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  • Calibrate and scale your logistics operations to handle fluctuations in supply and demand due to seasonal spikes, shifts in government regulations and fuel prices, or other dynamics.
  • Manage volatility and disruptions across your end-to-end network.
  • Expand into new markets by leveraging your 3PL’s established network of facilities and partners to help you reach customers and launch new business lines around the world.

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Now that you have a good grasp of what 3PLs are and the business impact they can deliver, you need to determine if your organization could benefit from enlisting the services of a 3PL provider.

Below are some telltale signs that your business needs a 3PL partner:

Once you’ve decided that your business could benefit from a partnership with a 3PL, you need to begin the process of evaluating the numerous providers out there and choosing the right one for your business .

During your evaluation and decision process, here are some key factors to consider:

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  • A proven track record of delivering on time, in full for customers around the globe and across different industries.
  • Shipping speed options (such as one- or two-day delivery) that meet your needs.
  • The capability to handle increased or decreased volume when your business experiences sudden surges or drops in demand.

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By devoting time to conducting in-depth research and considering the factors highlighted above, you can find the right 3PL for your business.

Working with right 3PL partner can truly transform your business, empowering you to drive long-term bottom-line growth by:

  • Keeping your end-to-end logistics operations running as efficiently as possible.
  • Keeping your warehousing, inventory management, and fulfillment costs down.
  • Keeping your customers happy by delivering on time, every time.

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3PL Logistics Guide

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For many entrepreneurs, the fun part of owning an e-commerce business is connecting all kinds of consumers with various products. However, the logistical parts – inventory management, packaging, shipping, tracking and more – might not be as enjoyable for these business owners.

If this sounds like you, or if your company has grown too large to handle e-commerce logistics processes in-house, you might benefit from hiring a third-party logistics (3PL) company. Our guide breaks down what a 3PL firm is, the benefits of using one and the best providers for small businesses.

What is third-party logistics (3PL)?

Third-party logistics, commonly known by the abbreviation 3PL, is the outsourcing of e-commerce logistics processes to a third-party company. These processes may include warehousing and inventory management , as well as order fulfillment. If you own an online business, outsourcing your logistics processes to a 3PL provider can allow you to focus on other business ownership needs while automating your order fulfillment.  

What is the difference between 3PL and 4PL?

As you learn more about 3PL, you might also encounter the term “fourth-party logistics.” 4PL companies are not themselves involved in e-commerce logistics as 3PL companies are. Rather, instead of overseeing warehousing, inventory management and order fulfillment, 4PLs find a 3PL for you and manage the 3PL’s work on your behalf. This is why these companies are called 4PLs: They’re the fourth party in your e-commerce logistics chain after your company, your customers and your 3PL provider.

What are the basic types of 3PL companies?

3PL companies can be broken down into several categories:

  • Distribution-based: These 3PL firms store your products until you send them orders. Once the 3PL provider receives the order, it picks items from its stock, packages the items and ships them to the recipient.
  • Financial-based: Such 3PL companies specialize in the finance side of e-commerce logistics, such as freight payment, audits, and accounting and financial management of inventory.
  • Forwarder-based: With this style, 3PL providers focus primarily on directing stock from your warehouse to a mail carrier that handles delivery.
  • Information-based: These 3PL companies are based online and focused primarily on B2B operations. They leverage electronic markets to power their logistics and transportation services.
  • Transportation-based: Here, 3PL teams focus on transportation from factories to warehouses and then to customers.

What are the benefits of using 3PL providers for e-commerce logistics?

These are some reasons your e-commerce company might benefit from working with a 3PL provider:

  • Faster, more affordable e-commerce operations: Yes, you’ll have to pay to hire a 3PL, but the money you’ll likely save on inventory management software , shipping software and other e-commerce platforms will almost certainly offset this cost. So will the time you no longer have to spend tracking your inventory, ordering stock, printing labels and bringing packages to your nearest mail carrier. [See mailing equipment solutions for small businesses .]
  • Easier scaling: If your company grows to the point where it receives more orders per day than a small team can manage, 3PL providers can help you scale more easily. That’s because 3PL companies have their own warehouses, stock, forklifts, inventory management software and other tools that would likely be a headache (not to mention a financial burden) for you to obtain. You’ll also get time back to devote to tasks that might better suit an entrepreneur, such as focusing on your business marketing plan .
  • Access to industry expertise: Whereas you might be more familiar with entrepreneurship and business management, 3PL companies live and breathe e-commerce logistics. You can rest assured that a good 3PL provider is capable of elevating your product delivery operations to their maximum potential.
  • More affordable shipping: An e-commerce company is a great home-based business idea , but a home setup doesn’t just mean a lack of inventory storage space; it also means your shipping costs will vary significantly based on where your customers live. Hiring a 3PL can lower these variable costs since your shipping payments are included in the 3PL’s work.
  • More shipping locations: The same shipping cost concerns can make reaching certain customers far tougher without 3PL. For example, if you’re based in California, shipping to Maine might be much more expensive than shipping to Nevada, thus discouraging you from selling to Maine-based customers. 3PLs eliminate this barrier since they have warehouses all over the country (and the world), so you can ship to pretty much any customer and not geographically limit your client base.
  • More satisfied customers: The faster you can deliver items to your customers, the happier they’ll be. With 3PL, this rapid delivery is far more feasible than it would be if you handled shipping in-house. That’s because, as mentioned, 3PL providers have warehouses across the globe, so they have extensive control over delivery times.
  • Less risk: We’ve all had packages arrive late and felt impatient as we awaited them. With 3PL services, you can set up alternate shipping arrangements in the case of delays or even lost packages, keeping your customers satisfied. You’ll also be legally protected in this scenario. Because the 3PL company is handling your shipping, the 3PL, not your business, is responsible for dealing with shipping issues.

The benefits of outsourcing your e-commerce logistics to 3PL companies include quicker and more affordable operations, easier scaling, a larger potential customer base and more satisfied customers.

What services do 3PL providers offer?

The most common services 3PL providers offer include:

  • Alternate shipping arrangements: If an order is lost or won’t make it to your customer quickly enough for their needs, you can set up alternate shipping arrangements with your 3PL far more easily than if you handled logistics yourself. Your 3PL provider likely has several warehouses throughout the country, so it can quickly resend an item with expedited shipping at significantly less cost than you can.
  • Distributed inventory: This is the e-commerce term for the storage of stock at several locations rather than one warehouse. With stock distributed among several 3PL locations, your provider can deliver items to customers from the locations nearest to them rather than a faraway warehouse. With this physical proximity comes faster and less costly shipping.
  • Expedited shipping: Let’s say your e-commerce company has just one warehouse, located in Oregon. In that case, overnight shipping to Florida is a significant challenge. However, since your 3PL provider likely has distributed inventory, expedited shipping may become more realistic. Reaching Florida overnight from a 3PL warehouse in the Southeast is entirely feasible.
  • Inventory management: Although hiring a 3PL company removes the burden of inventory storage from your business, you should still know which items you sell are in stock, nearly sold out or out of stock at any given moment. Your 3PL provider can manage your inventory for you and keep you in the know about your stock levels without any extra work on your behalf.
  • Kitting and assembly: This process entails piecing separate inventory items into one product to be packed and shipped to the customer. Outsourcing this task to a 3PL saves your company manual labor and thus time and money.
  • Picking and packing: This process involves finding the appropriate items in a warehouse and adding them to a package in a manner appropriate for damage-free shipping. Unlike kitting and assembly, picking and packing means the addition of several distinct products to a package rather than the assembly of several parts into one item. Put another way, picking and packing involves fitting all of a customer’s items into their shipment, not preparing one larger item from smaller parts.
  • Returns management: All e-commerce companies, even those supremely confident in their products, should have firm return policies in place. Your 3PL provider can help you uphold these policies. It will oversee all your product returns on your behalf, relieving you of the time-consuming logistics that can accompany starting customer returns, generating shipping labels and reentering returned items into your inventory.

Among the services your 3PL provider may offer are distributed inventory, expedited shipping and returns management – all of which save you time.

Which companies use 3PL providers?

If you go the 3PL route, you won’t be alone. At least 90 percent of Fortune 500 companies hire at least one 3PL provider. For example, 3PL firm DB Schenker (see below) oversees logistics for Apple, Procter & Gamble, Dell and other well-known businesses.

Partnering with a 3PL provider to outsource your shipping can eliminate some of the common challenges e-commerce businesses face , such as order fulfillment issues.

Which 3PL providers are best for small businesses?

Dozens of 3PL providers exist, but many of them are geared toward Fortune 500 companies. However, some 3PL providers that Fortune 500 companies use also offer services suitable for small businesses. The first three providers on the list below fall into this category, whereas the final two may be more obvious fits for SMBs. In all cases, you’ll need to contact the vendor for a quote before opening an account.

C.H. Robinson

C.H. Robinson is a freight and supply chain company that oversees logistics for hundreds of thousands of customers, including household names such as Coca-Cola and Target. Its truckload and less-than-truckload (LTL) services can be ideal for small and midsize businesses, though its other offerings may better suit large corporations. See C.H. Robinson’s full list of services to learn more.

DB Schenker

Like C.H. Robinson, DB Schenker, serves Fortune 500 companies but offers part- and full-load services that may benefit SMBs. The vendor promises access to exclusive technology that it asserts offers more transparent, real-time tracking than any of its competitors. Check out DB Schenker’s land transport services page to learn more.

Kuehne+Nagel

Kuehne+Nagel offers LTL services through which e-commerce companies can provide their customers with accurate shipping prices, track and document shipments, more efficiently acquire stock, and transition from manual cataloging to digital inventory management. To learn more, read Kuehne+Nagel’s brochure .

The aforementioned ShipBob offers a tech-enabled fulfillment network through which e-commerce businesses can enjoy fast, affordable shipping. ShipBob also says it can save your company time and money, promising:

  • Up to a 13 percent increase in bottom-line cost savings
  • Up to a 97 percent increase in average order value
  • Up to an 18 percent decrease in abandoned carts
  • Up to 120 fewer labor hours

The vendor bases its quotes on your specific needs for receiving, storage, picking and packing, and standard packing and shipping services. 

Warehouse Anywhere

Warehouse Anywhere is a 3PL provider that owns more than 10,000 warehouses. It offers delivery, online and mobile warehouse services, as well as inventory management tools that allow for several users, real-time inventory tracking and thorough warehouse leasing controls.

Warehouse Anywhere says that its Core+ pricing plan is best for storage asset management, Pro (its most popular tier) and Enterprise are best for inventory and storage asset management, and Lightspeed is best for e-commerce. However, you’ll still need to contact Warehouse Anywhere for a quote if you’re interested.

Streamlining operations with 3PL

3PL companies are useful for more than just the biggest businesses. Small business owners can also use their services to fully power their e-commerce operations. 3PL companies can handle both the most tedious and important logistics on your behalf, leaving you free to focus on customer-facing work. They get your shipments where they’re going, and you get to focus on the joy of connecting customers with the products they need.

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What Is 3PL? A Guide to Third-party Logistics Services

Published May 19, 2023

Meaghan Brophy

REVIEWED BY: Meaghan Brophy

Agatha Aviso

WRITTEN BY: Agatha Aviso

This article is part of a larger series on Retail Management .

  • 1 How 3PL Works
  • 2 Pros & Cons
  • 3 Is 3PL Right for Your Business?
  • 4 How to Choose a 3PL Provider
  • 6 Bottom Line

A 3PL (or a third-party logistics provider) is an outsourced partner that handles logistics processes for other businesses. 3PLs are commonly used by ecommerce companies that still manage product- and order-related tasks but want to delegate inventory management, warehousing, and fulfillment (including shipping, distribution, returns, and exchanges). Partnering with a 3PL company allows merchants to focus on other aspects of their business.

It’s crucial to understand what 3PL is before you decide to work with a 3PL provider. This guide covers how the 3PL process works, the different types of 3PL services you can use, and how to choose the right 3PL provider for your business.

Already decided to outsource your fulfillment operations? Check out our top recommendations for the best 3PL companies .

How 3PL Works

3PL providers offer different logistics services depending on the company. Order fulfillment companies are 3PL providers that offer warehousing, inventory management, order processing, order packaging, and shipping. Other 3PL companies may specialize in freight, import/export, or distribution services.

Did you know?

3PL is often used interchangeably with order fulfillment, fulfillment center, or fulfillment warehouse. However, order fulfillment companies are a type of 3PL that ecommerce businesses use to outsource their fulfillment process. A fulfillment center is a 3PL, but not all 3PLs are fulfillment centers.

Most businesses that use 3PL fulfillment companies still manage product sourcing , manufacturing , and procurement. Third-party logistics start when your products are shipped to a 3PL warehouse.

  • Receiving/warehousing and inventory: The 3PL provider receives product inventory and organizes each SKU in its warehouse facility. Product inventory is ideally synced with your online store(s).
  • Order management: When an order is placed on your ecommerce site, it is manually forwarded to the 3PL or automatically pushed through an integration with your ecommerce platform.
  • Picking: Warehouse staff gets a picking list to collect the ordered products.
  • Packing: The items are packed in boxes with the receipt and order details.
  • Shipping: The 3PL uses one of its shipping carrier partners to print a label for each order. The shipping carrier collects the package from your 3PL’s distribution center and delivers it to your customer.
  • Tracking: Tracking information is uploaded to the 3PL system and synced with your store’s order management or inventory software.

1PL vs 2PL vs 3PL vs 4PL

Outsourcing logistics operations can be done using different business models. Here, we briefly explain the differences between 1PL, 2PL, 3PL, and 4PL.

  • 1PL: A merchant that sends goods or products from one location to another is a 1PL. For example, a local coffee roaster that transports coffee beans directly to a cafe or coffee shop for sale is a 1PL.
  • 2PL: Couriers collect orders or parcels from your warehouse and deliver them to the customer. That same local roaster might hire a 2PL, like UPS or FedEx, to transport coffee beans from their facility to the cafe.
  • 3PL: Inventory is stored, picked, packed, and shipped by a third-party provider. In our example, a 3PL may be responsible for storing the roasted beans, receiving orders from local cafes, packing bags of coffee beans into boxes, and shipping the orders from the warehouse to the cafe.
  • 4PL: This type of provider takes care of all logistics-related activities for a business, including managing the fulfillment partners (3PLs) you’re working with. Its team negotiates contracts and communicates between you and the distributor, as well as handles the logistics of product sourcing and other parts of the supply chain. In this case, the 4PL may manage the process of importing raw coffee beans, managing the fulfillment company, and communicating with the roaster to produce more beans as the cafe’s needs increase.

Types of 3PL Providers

3PL companies provide distribution, storage, transport, and fulfillment services. They usually offer logistics services that support some or all aspects of fulfillment and shipping and are typically integrated into a company’s warehousing and transportation operations.

The different types of 3PL providers you can partner with are the following:

  • Distribution-based: These 3PL companies store your products until you send them orders. Once your 3PL provider receives these orders, it picks items from its stock, packages the items, and ships them to the recipient.
  • Financial-based: These 3PL companies specialize in the finance side of ecommerce logistics, such as freight payment, audits, and accounting and financial management of inventory.
  • Forwarder-based: These 3PL providers focus primarily on directing your stock from your warehouse to a mail carrier that handles delivery.
  • Information-based: These 3PL companies are based online and focused primarily on B2B operations. They leverage electronic markets to power their logistics and transportation services.
  • Transportation-based: These 3PL teams focus on transportation from factories to warehouses and then to customers.

3PL Services

Here are some 3PL logistics examples of services that outsourced partners can provide:

  • Warehouse and inventory management: A 3PL provides storage space (warehousing) for inventory as well as inventory management solutions to help manage it. 3PLs usually have multiple warehouses, which keep your products within close range of customers so you can provide faster shipping turnaround. They can relocate inventory based on where most of your orders are coming from, too.
  • Order management and fulfillment: 3PLs have an order management system that tracks stock levels across warehouses and integrates with your ecommerce platform, so you can still manage or oversee shipping. They send order confirmations to customers as well as shipping and delivery notifications.
  • Value-added specialized fulfillment services: Custom fulfillment services like kitting, bundling, personalized notes, gift wrapping, and more are also offered by 3PLs.
  • Shipping and transport coordination: 3PLs work with established shipping companies or maintain their own shipping fleet. Beyond shipping, they may provide services like freight brokering and/or freight forwarding.
  • Reverse logistics (returns): Full-service 3PLs also manage returns and exchanges, along with customer service.
  • International logistics: Some 3PLs have locations in multiple countries so that you can perform local fulfillment in foreign markets , which saves on shipping and customs costs. Many domestic fulfillment providers have options for cross-border shipping, such as DDP (delivery duty paid) options 3PLs can also offer customs clearance and international freight forwarding for import/export needs.

Pros & Cons of 3PL

3PL has its benefits as well as risks and disadvantages. As a business owner, it is up to you to weigh if the risks outweigh the benefits your business will get.

  • 3PL Advantages
  • 3PL Disadvantages

Some benefits your business can get from using a third-party logistics provider include:

  • Your orders are processed by experts specializing in order fulfillment. Also, you have access to value-added services that enhance your ecommerce business, such as kitting, packaging customization, and freight brokering. 3PL companies can help you choose the best packaging, shipping, and inventory management options for your business.
  • You don’t have to lease warehouse space or hire staff. Through a 3PL you can easily increase or decrease your on-hand resources (like storage space and labor). This lets you save money and easily scale up or down as business flucates.
  • Your business operations may be in a prime spot to ship nationwide. Many 3PLs have multiple fulfillment centers strategically positioned throughout the country so your products are closer to your customers—which means faster delivery and lower shipping costs. Additionally, 3PL companies are volume shippers and usually have discounted shipping prices with major carriers, helping reduce your shipping spend.
  • 3PL companies can handle returns (reverse logistics). This gives you an efficient way to give your customers more flexibility and get your products back on the shelf quickly.

There are disadvantages to 3PL as well. Some of these are the following:

  • There is an upfront investment. While 3PLs can reduce your overhead costs, there can sometimes be significant upfront costs when onboarding with a 3PL provider. Some companies charge for services such as integrating their software with your ecommerce store, SKU upload, and account access. Additionally, many 3PLs have a minimum monthly spend or order volume that you must meet (or pay an extra charge). Learn more about order fulfillment costs and pricing .
  • 3PL providers maintain their own operations, which may have different working hours or workflows from your company. You cannot overrule or intervene in their operations immediately, as service contracts are in place. This also makes it difficult (or impossible) to customize orders and fulfill special customer requests on the fly.
  • The 3PL’s services reflect on your brand. Any inefficiencies or errors that your customers experience (like incomplete orders, late shipments, mismatched addresses, or breakage during shipping) will represent your business, not theirs. By outsourcing your logistics processes, you lose control over service quality.

Is 3PL Right for Your Business?

To know if it is time to use third-party logistics for your ecommerce business, here are some telltale signs:

You Ship Over 100 Orders a Month

If that’s where you are, compare the costs of partnering with a 3PL so you can maintain or even improve your profit margins. Outsourcing packing, picking, and shipping can save you a lot of time as well as money. Growth potential also heightens when you decide to outsource fulfillment to a 3PL.

You’re Running Out of Inventory Space

As sales grow, you will need more onhand inventory, and if you’re fulfilling orders in-house, finding storage space can be a problem. A 3PL warehouse can help with more inventory space, and outsourcing inventory and order fulfillment to a 3PL will help you efficiently manage inventory. Moreover, you don’t have to worry about inventory storage limitations if you plan to expand your product line.

Your Existing System Can’t Handle a Surge in Demand

Suppose you have flash sales or go through the usual sales spikes during holiday seasons. Will you be able to handle the influx of orders? If these spikes create the need to hire seasonal staff and/or rent temporary working spaces, outsourcing to a 3PL might be a more cost-effective solution.

You Want to Offer Free Two-day Shipping

These days, online shoppers expect two- to three-day shipping , and 83% prefer stores that offer free shipping . Offering these can take a considerable toll on your profit margins. Working with a 3PL provider gives you access to lower shipping costs and faster delivery times, as these companies are volume shippers and have special discounted rates with courier companies. Also, their fulfillment centers are strategically located in key parts of the country, allowing for faster delivery.

How to Choose a 3PL Provider

If you are ready to partner with a 3PL or are considering multiple 3PL providers, here’s what you need to know to choose the right vendor.

Know Their Area of Expertise

Expertise is vital in helping you identify which 3PL provider can meet a specific fulfillment need. For example, if you sell bulky or heavy products over 10 pounds, Red Stag Fulfillment is our recommended provider for oversized shipping and special handling needs. If you have manageable and lightweight items and want extensive integrations, startup-friendly rates, and a vast distribution network, we recommend ShipBob (our top pick among the best 3PL providers).

Evaluate the Scale of Their Operations

One of the advantages of going with a 3PL provider is that you can leverage their existing logistic operations—from storing, picking, and packing to shipping orders. You need to evaluate their operational efficiency and find out about the following:

  • The number of warehouses they operate, their locations (consider if their locations are in areas where you commonly receive high-volume orders)
  • Their monthly volume shipments in the following categories: B2C, B2B, domestic, and international
  • Operational hours
  • Value-added or specialized services such as kitting, custom packing slips, gift messages, or gift cards
  • Their maximum capacity
  • Reverse logistics (returns) options
  • Next-day fulfillment execution and cutoff times
  • Workflow for order volume spikes

Knowing these factors will help you gauge whether a 3PL can handle your business as it scales.

Ask About Fulfillment Costs

There are associated fulfillment costs when you partner with a 3PL, like warehousing, storage, and shipping fees. Let them provide a quote so you can calculate your potential savings or compare their prices against your current in-house fulfillment costs. It’s a good idea to get quotes from multiple 3PLs to compare rates and get the best deal.

Ask About Contracts & Service Level Agreements (SLA)

Ask about contract agreements and SLAs before signing up with a new 3PL provider. Some details to look out for or ask about include inventory turnaround time, order processing time, error and reimbursement policies, insurance availability, contract requirements, and the process involved in terminating services.

Determine the Level of Support They Provide

Find out what kind of support the 3PL provider offers by asking about the communication channels their service team uses, their average response time, and whether the team is employed domestically or outsourced. Will you have a dedicated customer agent for your account? Also, ask about their reporting tools and communication policies about new orders, shipping notices, returns, adjustment notifications, etc.

Check for Available Integrations

This is usually the dealbreaker if you already have a shortlist of 3PL providers. You need to confirm if they can integrate with your existing ecommerce platforms as well as inventory, order management, and warehouse management systems. They should be able to synchronize with your current systems to fulfill orders and update inventory levels automatically.

What Is 3PL Frequently Asked Questions (FAQs)

What is a 3pl.

A 3PL (or a third-party logistics company) is an outsourced provider that businesses hire to handle logistics processes on their behalf. 3PLs take care of tasks such as inventory management, warehousing, order fulfillment, and shipping.

What is a 3PL example?

Some 3PL examples are:

  • Fulfillment centers (like Fulfillment by Amazon and ShipBob)
  • Freight brokers (like Redhawk Logistics)
  • Shipping carriers (like UPS and FedEx)
  • Freight forwarders (like Flexport)

Examples of 3PL services include outsourcing logistics operations such as warehousing and inventory, order management and fulfillment, product distribution, and product returns and exchanges.

What are the reasons for using a 3PL?

Ecommerce businesses choose to go with a 3PL provider because they cannot handle their order volumes anymore, are running out of storage space for their inventory, or want to offer fast shipping for their products. Most businesses that are scaling or growing can benefit from partnering with a fulfillment 3PL to automate their logistics processes.

Bottom Line

Small businesses can benefit from outsourcing to 3PLs since it minimizes the risk of funding and staffing your own operations. Understanding how 3PL solutions work helps you identify which services would be beneficial for your business to outsource and which partners are the best options for you.

If you’re searching for the right 3PL company for your operation, we recommend starting with the logistics matchmaker FulfillmentCompanies.net. It’s a free service that matches your business’ distribution needs to hundreds of 3PL companies. Get free 3PL quotes by visiting their site today.

Visit FulfillmentCompanies.net

About the Author

Agatha Aviso

Find Agatha On LinkedIn

Agatha Aviso

Agatha Aviso is a retail software expert writer at Fit Small Business. She specializes in evaluating ecommerce and retail software features that help small businesses grow. She has evaluated dozens of the top software for retail SMBs. Agatha has more than 10 years of experience writing online content for both small business owners as well as the marketing industry. She also served as a content strategist and digital marketing manager for many entrepreneurs.

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What is 3PL? The ultimate guide to third-party logistics

A woman and man looking at a logistics document in a room surrounded by boxes.

The concept of third-party logistics has been around for decades, with its origins in the transportation industry. In the early days, shipping companies would contract with independent carriers to transport goods on their behalf. Over time, the concept evolved to include other logistics functions such as warehousing, order fulfillment and distribution.

What is third-party logistics?

Third-party logistics companies, commonly known as 3PLs, deliver outsourced logistics and supply chain management functions as third-party providers. Businesses of all sizes and industries use 3PL services to improve supply chain efficiency and streamline operations.

What types of services do 3PL companies provide?

3PLs are experts in various areas of logistics :

  • Freight brokerage (including LTL )
  • Warehousing

Distribution and fulfillment

  • Supply chain management

First-party logistics

A 1PL (First-Party Logistics) provider is a company that handles its own logistics and supply chain management functions in-house without outsourcing to a third-party provider. Essentially, a 1PL is a business that manages its logistics operations using its own resources, such as trucks, warehouses and distribution centers.

Second-party logistics

A 2PL (Second-Party Logistics) is a company that provides logistics services to another company, usually as part of a contractual arrangement. Unlike a 3PL, a 2PL does not offer a full range of logistics services but focuses on specific functions, such as transportation or warehousing. 2PL providers include trucking companies, shipping agents and freight forwarders.

A 2PL typically works closely with the customer to design and implement logistics solutions that meet their specific needs. This may involve managing the transportation of goods between different locations, providing storage and warehousing services, or coordinating the delivery of goods to customers.

5 types of third-party logistics providers

There are several different types of 3PL providers, each offering unique services and capabilities. Some common types of 3PL providers include:

  • Transportation-based 3PLs: These providers specialize in managing transportation functions such as shipping, air freight, intermodal , LTL , and ground transportation.
  • Warehouse and distribution-based 3PLs:  These companies offer their clients warehousing, order fulfillment, and distribution services. Often, these are critical factors in staging products or raw materials to fulfill customer orders or keep manufacturing lines moving.
  • Freight forwarding agents and customs brokers: These providers act as intermediaries between shippers and carriers in international movements. Companies in this area of business work with air freight providers, ocean carriers and customs officials to ensure cargo complies with the requirements of individual nations. It can smoothly move across international borders on its way to each shipment’s destination.
  • Financial-based 3PL providers: These providers offer services such as freight bill auditing and payment, as well as insurance and other financial services related to logistics.
  • Information-based 3PLs: These providers offer software and other technology solutions to help companies manager their logistics operations more effectively.

Freight Tip:

When choosing a 3PL provider, it’s essential to consider factors such as the provider’s experience, industry expertise and geographic coverage. Companies should also consider the provider’s track record in meeting service-level agreements and their ability to provide real-time visibility into logistics operations.

Advantages of partnering with 3PLs

Third-party logistics providers offer a comprehensive range of services beyond simple freight movements and transportation. Ultimately, a good 3PL acts as an extension of your business, working to deliver exceptional service as they help a company deliver its bottom line. Here are some of the most valuable ways a 3PL can help your business:

Custom Logistics Solutions: 3PLs are known for their ability to provide tailored solutions based on a company’s unique logistics requirements. They can design logistics services to meet specific needs, such as providing specialized warehousing facilities or offering value-added services like kitting and assembly. This level of customization is not typically offered by freight forwarders and carriers, which generally provide standardized services.

Enhanced Technology: 3PLs often invest heavily in technology to improve supply chain visibility, tracking and reporting. They use advanced software systems and tools to manage inventory, track shipments and provide real-time data and analytics to their clients.

Supply Chain Integration: 3PLs can integrate their services with a company’s existing supply chain systems, such as enterprise resource planning (ERP) software, warehouse management platforms or internal transportation management systems to provide seamless logistics management. This allows businesses to have a holistic view of their supply chain, gain actionable insights and make informed decisions based on real-time data.

Access to a global network: 3PL providers often have a worldwide network of partners and vendors, allowing businesses to tap into new markets and expand their reach. This can be especially beneficial for companies looking to expand their operations into new geographic regions.

Improved customer service:  By outsourcing logistics functions to a third-party provider, businesses can improve their customer service by ensuring products are delivered on time and in good condition. 3PLs can tap into an extensive network of shipping partners to deliver capacity when needed, overcome unforeseen issues and ensure a company’s supply chain keeps moving and orders are filled. This can help increase customer satisfaction and loyalty, ultimately driving growth and profitability.

While other types of logistics providers may offer some of the same services as 3PLs, the critical difference lies in the range and depth of services provided. Good 3PLs offer a comprehensive suite of logistics services, focusing on customization, technology, integration and global reach, enabling businesses to improve supply chain efficiency and reduce costs.

What are the benefits of outsourcing to a 3PL

Outsourcing logistics and supply chain functions to a 3PL can offer a range of benefits to businesses of all sizes and industries. Some of the key benefits of outsourcing to a 3PL include the following:

  • Cost savings:  One of the primary reasons for outsourcing to a 3PL is the potential cost savings it can provide. Companies that manage their logistics in-house must invest in expensive infrastructure, equipment, software platforms and personnel to handle transportation, warehousing and distribution. By outsourcing these functions to a 3PL company, companies can reduce their overhead costs and distribute resources to other areas of their business.

Expertise and specialized knowledge:  Larger 3PLs have the experience and knowledge to manage complex supply chain operations, from coordinating shipments to optimizing warehouse layouts. They also stay up-to-date with the latest trends and technologies in the logistics industry, allowing them to provide their clients with innovative solutions and improved efficiencies.

Scalability and flexibility: 3PL providers offer scalability and flexibility, which is especially important for businesses with fluctuating demand or seasonal peaks. Instead of investing in more resources to manage spikes in demand, businesses can rely on their 3PL provider to handle the extra workload. This allows companies to stay agile and responsive to changing market conditions without the burden of maintaining excess capacity.

Coordinating international freight movements:  Many 3PLs, especially those that are part of a larger transportation provider, often provide global logistics services to their clients. They have the knowledge and expertise to navigate complex regulations, customs procedures, and trade restrictions in different countries. Ocean carriers and freight forwarders may also offer international shipping services, such as cross border shipping, but they may have a different level of global reach and expertise than 3PLs.

Real-time visibility and reporting: Many 3PLs offer real-time tracking and reporting tools that can help companies stay informed and in control of their logistics operations. This can help to improve efficiency and reduce the risk of errors or delays in the supply chain.

Overall, outsourcing logistics functions to a 3PL can provide solid opportunities to serve customers better and optimize a company’s supply chain. By leveraging the expertise and capabilities of a 3PL, businesses can improve efficiency, reduce costs and stay competitive in today’s rapidly changing market.

Six potential disadvantages of partnering with a 3PL company

While outsourcing logistics functions to a third-party logistics (3PL) provider can offer many benefits, there are also some potential “watchouts” to consider:

  • Inordinately high cost:   While outsourcing logistics functions to a 3PL often results in cost savings, in some cases it can also be more expensive than managing logistics in-house. This is especially true for businesses with high-volume shipments, as 3PLs may charge fees for each load or transaction. Additionally, 3PLs may charge extra fees for value-added services, such as packaging, labeling or inventory management.

Loss of control over your supply chain :  Outsourcing logistics functions to a 3PL means relinquishing some control over the supply chain. This can be a disadvantage for businesses that need complete visibility and control over their logistics operations. Many companies that lack strong process adherence and generate a lot of last-minute issues may need in-house control to ensure shipments move, and quick decisions can be made on the spot.

Communication and coordination problems :  Communication and coordination can be challenging when working with any outsourced provider. Businesses must ensure that their 3PL is aware of their unique logistics requirements and has the necessary resources to meet those requirements. Miscommunication or lack of coordination can result in delays, errors, lost shipments and ultimately, lost business.

Dependence on a third-party provider :  Businesses that outsource logistics functions to a 3PL become dependent on that provider to maintain supply chain operations. This can create an unintended risk of supply chain disruption if the 3PL provider experiences issues or goes out of business. Companies must have contingency plans in place to mitigate these risks.

Limited flexibility :  While 3PLs offer scalability and flexibility, there may be limitations to the level of customization or flexibility they can provide. Some 3PLs may have standard processes and procedures that cannot be tailored to the specific needs of a business.

Freight reliability and performance concerns :  When outsourcing logistics functions to a 3PL, businesses must rely on that provider to maintain quality control standards, use safe carriers and enforce high performance standards. If the 3PL company does not meet these basic requirements, it can result in damaged products, lost shipments and dissatisfied customers.

Companies must carefully assess their logistics needs and weigh the pros and cons of outsourcing before deciding to outsource some or all of their logistics needs. Choosing a reliable and experienced 3PL provider that can meet a company’s unique logistics requirements is also essential.

How to optimize 3PL performance for your organization

To get the best from a 3PL , companies need to establish a strong working relationship and collaborate closely with their providers. Here are some tips on how to do this:

Clearly define goals and expectations :  Before partnering with a 3PL company, logistics goals and expectations must be matched with business objectives and shared with the 3PL. This includes identifying key performance indicators (KPIs) and metrics that will be used to measure success.

Select the right provider :  Companies should take the time to carefully assess potential third-party logistics providers and choose a good fit for their business. The provider’s experience, expertise, technical capabilities and customer ratings should all be considered before entering into a new relationship with a 3PL.

Communicate regularly :  Continuous check-ins and visibility are critical factors in building a solid working relationship with a 3PL. Companies should establish regular updates and reporting mechanisms to ensure they stay informed about the status of their logistics operations.

Share information :  Companies should be transparent with their 3PL, sharing relevant information about their business, such as sales forecasts, inventory levels and customer demand. This can help the provider to better predict and respond to changes in the business.

Provide feedback :  The business must give regular feedback to their 3PL. Regular feedback helps the 3PL continuously improve and optimize its logistics operations. Strong relationships depend on each side knowing where it stands, whether positive or negative.

Collaborate on continuous improvement :  Companies and their logistics providers should work together to find areas for improvement and implement strategies to optimize and streamline logistics operations. This includes operational inefficiencies, new technologies, safety best practices, lane optimization, modal mix, process improvement and more.

Building a solid working relationship with your 3PL is the most effective way to get the best possible results from your logistics operations.

What to expect from 3PLs in the future

Third-party logistics is a rapidly evolving industry, and there are several trends and advancements that shippers can expect to see in the future. Here are some of the top developments to watch out for:

Increased use of advanced technologies:   The logistics industry is increasingly adopting advanced technologies such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT) and blockchain. These technologies can help 3PLs improve supply chain visibility, optimize transportation routes and enhance customer experiences.

More sustainable and eco-friendly practices:  As the world becomes more environmentally conscious, 3PLs are starting to implement sustainable and eco-friendly practices in their operations. This includes using electric or hybrid vehicles, reducing packaging waste and adopting more efficient transportation routes.

Growing demand for e-commerce logistics:  With the rise of e-commerce, there is an increasing demand for logistics services that can handle last-mile delivery and reverse logistics. Shippers can expect to see more 3PLs offering final mile, white glove and other specialized e-commerce logistics services to meet this demand.

Greater focus on cybersecurity:  As the logistics industry becomes more reliant on digital technologies, telematics, and cloud-based networks that feed into internal systems, there is a greater risk of cyber attacks. Shippers can expect to see 3PLs placing more emphasis on cybersecurity measures to protect their operations and customer data.

Increased emphasis on the customer experience:   Customer expectations continue to evolve and as a result, 3PLs have put a greater focus on delivering a positive customer experience. This includes providing real-time visibility into shipments, offering personalized services and implementing more efficient communication channels.

Shippers can expect to see 3PL companies providers continuing to innovate and adapt to changing industry trends in the future. By leveraging advanced technologies, implementing sustainable practices and focusing on customer experience, 3PL providers can stay ahead of the curve and continue delivering high value to their customers.

Why you should consider partnering with a third-party logistics company

Third-party logistics providers (3PLs) are a critical aspect of modern supply chain management. As businesses increasingly focus on core competencies, outsourcing logistics to 3PLs can help to reduce costs, improve efficiency and enhance customer experiences.

Over the years, the 3PL industry has evolved significantly, with providers adopting advanced technologies, embracing sustainable practices, and focusing on delivering value to their customers. 3PLs continue to make advancements in the industry, improving safety, service, technology, cybersecurity and sustainability practices.

Shippers who partner with 3PLs that are innovative, adaptable and customer-focused will be well-positioned to succeed in an increasingly competitive global marketplace.

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The Complete Guide To Third-Party Logistics (3PL)

3pl logistics business plan

Congratulations! Business must be booming if you’re looking to outsource your logistics. Partnering with a 3PL can have multiple benefits for your ecommerce business. With that being said, t can seem overwhelming at first glance. This guide will cover the key components of third-party logistics and how to select the ideal 3PL for your ecommerce business.

3PL: What Is A Third-Party Logistics Company?

Third-party logistics (3PL) refers to outsourcing your logistics operations and supply chain management to an external company. Third-party logistics (3PL) companies offer a wide range of services to different industries, including transportation, warehousing, inventory management, order fulfillment, and shipping. In addition to these core services, a 3PL company offers value-added services like customized packaging, labeling, returns management, customs brokerage, and supply chain consulting. 

The main objective of 3PL companies is to streamline your brand's supply chain operations and improve operational efficiency. Outsourcing logistics operations to a 3PL company allows your ecommerce business to benefit from economies of scale, specialized expertise, and a vast network of carriers and warehousing facilities.

3PL Functions:

  • Transportation

Warehousing

  • Inventory management
  • Order fulfillment
  • Reverse logistics
  • Technology integrations
  • Data analytics

Outsourcing these functions to third-party logistics providers can save your company time and resources while improving your supply chain efficiency.

How Does Third-Party Logistics Work?

Third-party logistics (3PL) requires the coordination of many transitory stages to create a streamlined order fulfillment process. A basic understanding of these stages can help you identify the logistics solutions you need most and tailor your service agreement with a 3PL accordingly. Third-party logistics typically involve the following stages.

Your third-party logistics (3PL) company receives your products from your domestic or overseas supplier, or your manufacturing facility. The inventory is checked for accuracy and quality to ensure nothing is missing or damaged. Your 3PL will log your products into an inventory management system and store them in their warehouse .

A 3PL stores your products in strategically placed fulfillment centers to ensure your products can be shipped to your customers quickly. This responsibility includes managing and organizing the inventory to make products easily accessible for fast picking.

Tech-enabled 3PLs use software integrations to connect directly with your ecommerce platform or marketplace. When your customers place an order, your 3PL provider receives it directly, and the fulfillment process begins. A fulfillment team locates the products in the warehouse and picks the items to fulfill the order.

The fulfillment team packs your customer’s order in packaging materials best suited to protect the product during shipping. Most carriers calculate shipping rates based on packaging dimensions. A 3PL may use different types of packaging material to secure the lowest dimensional weight and minimize logistics expenses.

A 3PL provider may also handle customized labeling and packaging. This allows you to create a more personalized customer experience. For example, WOLFpak , a provider of ultra-durable backpacks, includes various items in their packaging:

  • WOLFpak Token with engravings and flags of different countries
  • A velcro patch that reads, “Trust Your Instincts”
  • WOLFpak Sticker

These items help create a deeper emotional connection making customers feel like part of a community.

Your 3PL ships the orders to your customer using a preferred carrier. Shipping and tracking information is updated in the inventory management system for transparency. 3PLs with integrated technology will automatically push tracking details to your online store for customers to track their orders. The shipping speed for each order will depend on the 3PL’s partnerships, policies, and selected shipping options. 

In the event of product returns, your 3PL provider should take full responsibility for the process. They receive the returned products, inspect them to ensure they meet the required criteria for reselling, and then update inventory accordingly. From there, they manage the return process, ensuring that the products are restocked or reshipped with speed and efficiency. 

Learn more about reverse logistics by reading our article: Overcoming Ecommerce Return Processing Challenges With a 3PL .

What Are The Benefits Of Outsourcing To A Third-Party Logistics Provider?

With consumers demanding faster delivery options, companies are turning to third-party logistics (3PL) providers to help optimize their fulfillment processes and stay competitive. The sizable investment it would take to build an internal supply chain network isn’t practical for most businesses. When your company reaches a certain level of growth, it’s more efficient and cost-effective to outsource your logistics for the following reasons.

Faster Delivery Options

If you only have one fulfillment center in Boston, it will be a challenge to offer next-day or two delivery for your customers in San Diego. A 3PL can store your products at warehouses near key markets for faster delivery.

Save Time and Streamline Operations

First, a 3PL gives you more of the most valuable resource—time. With a dedicated 3PL handling your order fulfillment, you’ll have more time to strengthen other areas of your business. You also won’t need to hire staff, develop new technologies or build the infrastructure required for complex supply chains. Introducing these time-consuming and costly tasks could cause unneeded strain on your staff and disrupt your operations. 3PLs have the technology, trained personnel, and existing resources to provide end-to-end logistics solutions and streamline your operations.

Specialized Knowledge of Logistics

Top 3PL providers often have decades of experience in logistics and supply chain management. They’ve encountered everything from shortages of raw materials to disruptions in supply chains to political instability. Through this experience, 3PLs have learned valuable lessons and implemented systems to mitigate issues during the fulfillment process.

Provide Opportunities for Growth 

A 3PL provider gives you flexibility in your supply chain and growth opportunities. As your business evolves, it may experience fluctuations in demand and order volume. A 3PL can handle these fluctuations by scaling operations up or down to meet demand. Another growth opportunity is reaching global markets . A 3PL with a global supply chain network can help you navigate the regulations associated with international trade.

Read Irish at Heart’s case study to learn how SEKO Logistics helped the subscription box company manage their international expansion and fulfillment.

Gain a Competitive Advantage

Outsourcing your logistics to a 3PL gives you time to focus on your customer’s journey, improve your marketing, and expand to new markets. Companies that keep their fulfillment processes in-house or use inferior 3PLs may stagnate. With a top 3PL , you get access to valuable insights and guidance on supply chain optimization, enabling you to make informed decisions and stay ahead of the curve.

Deliver a First-class Customer Experience

A 3PL can help your business improve the customer experience with faster shipping, accurate order fulfillment, and reliable tracking information. According to Verte, 90 percent of consumers track their packages , and 80 percent have “high or very high expectations when it comes to package tracking.” With these statistics in mind, it’s essential to provide complete transparency and visibility within a customer’s order.

Learn more about the difference between a 3PL and in-house logistics in our article: 3PL vs. In-house: What’s the Difference?

When Is It Time For A Business To Consider Outsourcing To A 3PL?

In general, every ecommerce business should consider outsourcing to a 3PL provider. It may be prudent to conduct an analysis to identify potential cost-savings, efficiency gains, or the impact on the customer experience. One of the most evident signs is that logistics operations have become a distraction from allowing you to focus on core business functions. Check to see if your company has experienced any of the following indicators.

Lack of Expertise

If you feel your order fulfillment process and supply chains have become too complex to manage, it might be time to outsource your logistics to a 3PL. Continuing with inefficient processes can lead to higher costs and a poor customer experience.

Limited Resources

If your business lacks the resources to invest in logistics infrastructure, technology, and personnel, it can lead to capacity constraints and scalability issues. The last thing you want to do is cut into your profits or take on debt to expand your in-house warehousing or fulfillment services.

Demand Fluctuations

Demand fluctuations can lead to challenges in inventory management, picking, packing, and shipping orders. Outsourcing to a 3PL gives you flexibility in your supply chain to spike sales with targeted marketing campaigns, match unexpected changes in demand, or achieve sustainable growth.

International Expansion

If your business plans to expand internationally, it can lead to challenges in navigating customs regulations, language barriers, and cultural differences. Outsourcing to a 3PL provider with a global supply chain network and expertise in international trade can help your business navigate these challenges and reach new markets.

How Can Your Business Choose The Best 3PL Company?

With many 3PL companies available, finding a logistics partner that meets your specific needs and requirements can be challenging. When performing your due diligence, consider the following factors.

  • Expertise: Third-party logistics companies fulfillment services with end-to-end logistics can consolidate your order.
  • Years of Experience: A 3PL company with decades of experience shows they’ve weathered past storms and built a proven track record of success.
  • Technology Integrations: For a smooth and efficient order fulfillment process, top 3PLs should have a robust IT infrastructure to integrate with your ecommerce platform, allow custom APIs, and support sales channels.
  • Supply Chain Flexibility: The 3PL company you choose should be able to help you take advantage of peak season, handle new product launches, or expand into new markets.
  • Level of Customization: Look for a company that can customize its third-party logistics services to meet your needs and requirements.
  • Customer Support: The best 3PL companies should provide excellent customer support with proactive and responsive resolutions to any issues.

If you still feel unsure whether to hire a 3PL or keep your logistics in-house, read our article: Ecommerce Fulfillment: Choosing The Best Solution For Your Company .

How Can You Measure Your 3PL's Performance?

Measuring the performance of your third-party logistics (3PL) provider ensures your money’s not being wasted. Monitor these KPIs and set benchmarks to track your 3PL's performance over time and identify areas for improvement. 

  • On-time Delivery: Measure the percentage of orders delivered on time according to the agreed-upon delivery times negotiated in the service level agreement (SLA).
  • Order Accuracy: Evaluate the percentage of orders fulfilled accurately with the correct products, quantities, and shipping addresses.
  • Inventory Accuracy: Correctly measure the percentage of your inventory recorded in your systems.
  • Order Cycle Time: Track the time it takes for your 3PL to pick, pack, ship, and deliver an order to your customers.
  • Customer Satisfaction: Send out surveys, read reviews, track returns, and monitor customer complaints to measure customer satisfaction.

Beckman Coulter’s case study is a prime example of how SEKO can streamline processes and improve customer service.

How Can SEKO Help Optimize Your Company’s Logistics?

SEKO is a top third-party logistics provider due to its extensive range of services, innovative tech, and commitment to customer support.  With over 150 offices worldwide, SEKO can offer your ecommerce business end-to-end global logistics with award-winning solutions customized to your needs. SEKO has the expertise and resources to help your business optimize its supply chains, from warehousing and distribution to transportation and freight forwarding. 

Here’s what you get when you choose SEKO:

  • Hands-on service and support
  • Strong personal relationships
  • Creative and configured 3PL logistics solutions
  • Responsiveness and reliability
  • Flexibility and consistency

Contact us today to speak with our logistics experts and discover how SEKO can help your business achieve greatness.

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Logistics Strategy: Key to Success for 3PL Companies

Explore this comprehensive blog to build your logistics strategy for optimal performance in the dynamic 3PL industry.

What are the Objectives of a Logistics Strategy?

What are the top key components of a logistics strategy, what are the principles to consider when creating a logistics strategy, what are the common challenges in the 3pl industry, how do you build a tailored logistics strategy.

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Third-Party Logistics (3PL) companies play a crucial role as efficiency orchestrators, acting as intermediaries that handle transportation, warehousing, and distribution for multiple clients. For them, an effective logistics strategy is the key to success. A logistics strategy involves planning and managing the efficient flow of goods and services to meet business objectives.

In this blog, you will be able to:

  • revisit the objectives of a logistics strategy for 3PL companies
  • determine the different components of a logistics strategy
  • identify the important principles to consider in creating a logistics strategy
  • gain insights on the common challenges in the 3PL Industry
  • learn how to build a tailored logistics strategy

Your logistics strategy should aim for three goals: (a) expense optimization ; (b) capital efficiency ; and (c) service optimization .

1. Expense Optimization The logistics strategy centers on cost optimization, highlighting the identification and implementation of measures to cut expenses related to handling goods. This strategic emphasis aims to boost operational efficiency and financial performance by thoroughly examining and refining expenditure across different aspects of the logistics process. The objective of expense optimization is not merely to carelessly reduce costs but to elevate operational efficiency. By enhancing the efficiency of logistics operations, companies can realize cost savings while preserving or even improving the overall effectiveness of their services.

2. Capital Efficiency Capital efficiency in logistics means efficiently managing and optimizing financial resources in different aspects of supply chain and logistics operations. This includes maximizing the use of assets, such as warehouses, transportation vehicles, and equipment, to avoid unnecessary capital expenditure. Efficient asset use leads to cost savings and improved financial efficiency. This ensures the company has enough resources for daily operations without holding up excessive capital.

3. Service Optimization Service optimization involves refining and fine-tuning various aspects of logistics operations. Achieving a focus on each client's needs is a key component of service optimization. Streamlining processes, leveraging advanced technologies, and implementing best practices can enhance the quality and efficiency of service delivery. Improved logistics services are likely to result in higher client satisfaction.

Related Blog: Customer Retention Strategies for the Logistics Industry

Below are the five key components of a logistics strategy, outlining the fundamental elements that collectively form a comprehensive framework for effective supply chain management.

1. Carrier Relationships

Developing and maintaining strong relationships with carriers is crucial. This involves negotiating rates, establishing communication protocols, and ensuring reliability.

2. Technology Integration

Customer relationship management systems, tracking and tracing systems, and other tools enhance operational efficiency and visibility. Making use of a logistics CRM tool that can facilitate interactions with customers, carriers, or any stakeholder is a great way to ensure effective communications. This tool is instrumental not only in fostering communication but also in boosting sales by managing leads using a sales pipeline.

3. Market Analysis

This involves a comprehensive evaluation of the market to gain insights. These insights will be utilized to determine prevalent trends, improve customer service, and identify potential disruptions.

4. Risk Management

Identifying and mitigating risks associated with the transportation of goods. This includes considerations for weather, geopolitical factors, and other potential disruptions.

5. Regulatory Compliance

Staying informed about and compliant with regulations governing transportation and logistics. This includes understanding customs regulations, safety regulations, and any other legal requirements.

This section explores five essential principles that form the foundation of a logistics strategy created to exceed customer expectations.

1. Customer-Centricity in a Data-Driven Era A customer-centric logistics approach empowers businesses to deliver on promises with precision, ensuring accuracy and timeliness in every aspect of the supply chain. This commitment to customer satisfaction becomes a cornerstone for fostering loyalty.

By tailoring logistics processes to align with customer demands, businesses position themselves to respond proactively to market dynamics. Understanding and adapting to fluctuating demand patterns enable companies to optimize inventory levels, streamline transportation, and strategically position warehouses. This strategic alignment not only enhances operational efficiency but also enables businesses to navigate changes in the market landscape with agility.

Consistently meeting customer expectations not only enhances satisfaction but also contributes to the long-term loyalty of customers.

2. Optimization of Resources Resource optimization is a critical facet of logistics management, and leveraging data-driven techniques can significantly enhance efficiency across transportation, warehousing, and labor. Employing advanced algorithms and analytics empowers businesses to streamline their logistics processes, resulting in cost reduction and heightened operational efficiency.

The adoption of predictive modeling is instrumental in anticipating demand patterns, allowing for proactive adjustments in resource allocation. By analyzing historical data and identifying trends, businesses can optimize and ensure that transportation and warehousing capacities align seamlessly with anticipated requirements.

3. End-to-End Visibility To achieve comprehensive end-to-end supply chain visibility, businesses should implement real-time data integration. This approach empowers decision-makers with accurate insights, fostering agile and informed decision-making throughout the supply chain.

4. Flexibility and Adaptability Through Technological Framework To effectively manage logistics processes, it is crucial to architect them with scalable and adaptable frameworks. This means designing cloud-based solutions and strategies that can easily accommodate growth and changes in the business environment.

Cloud-based solutions offer numerous benefits for logistics processes. They provide a flexible and scalable infrastructure that can easily handle increased data storage and processing requirements. By maximizing cloud-based solutions, companies can ensure that their logistics operations are efficient, and capable of meeting the ever-changing demands of the business environment.

5. Nurturing a Culture of Technological Evolution Cultivating a culture of technological evolution is essential for businesses aiming to stay competitive and innovative. It helps to continuously aim for improvement through data-driven analysis and iterative optimization. Embrace advanced analytics tools that monitor key performance indicators (KPIs) in 3PL sales, driving ongoing enhancements in logistics processes. By fostering a culture of continuous improvement and innovation, businesses can position themselves at the forefront of technological evolution.

Related Blog: 7 Must-Have Features of a CRM in Logistics and Supply Chain Management

This section explains four common challenges in the 3PL industry, shedding light on key obstacles that logistics professionals often navigate.

1. Complex Supply Chain Networks.

Managing complex supply chain networks with multiple stakeholders, including suppliers, manufacturers, and distributors, poses challenges in coordination and communication. The intricacies of these networks require effective strategies to ensure smooth collaboration among various partners.

2. Global Logistics Challenges.

Operating on a global scale introduces challenges such as navigating international trade complexities, diverse regulations, and varied transportation networks. To ensure the smooth movement of goods, 3PL companies must tackle these challenges.

3. Technological Integration and Innovation.

Staying current with technological advancements and seamlessly integrating them into existing operations is a constant challenge for 3PL companies. This necessitates significant investment in technology and a culture of adaptability to leverage innovations that enhance efficiency and competitiveness.

4. Demand for Flexibility.

Meeting the diverse and customized requirements of clients while maintaining operational efficiency poses a continual challenge for 3PL companies. Adapting to changing client demands necessitates flexibility in logistics processes and a proactive approach to meet evolving customer needs.

After navigating the challenges present in the Third-Party Logistics (3PL) industry, your focus should shift to strategically mastering them.

In this section, you will learn how to build a tailored logistics strategy built to boost your 3PL business to success.

1. Setting Clear Objectives .

The cornerstone of a successful logistics strategy lies in setting clear and attainable objectives. Your logistics strategy must be aligned to your current business strategy.

2. Selecting the Right Technology.

In the modern logistics landscape, technology is a game-changer. Selecting the right Customer Relationship Management (CRM) software and other tools is essential. These technologies provide the necessary infrastructure for seamless execution of the logistics strategy.

3. Collaboration and Partnerships .

Logistics is a collaborative effort. Forge strategic partnerships with suppliers, carriers, and technology providers. Collaborative efforts enhance visibility, flexibility, and overall supply chain resilience.

4. Implementation .

Implementing a logistics strategy requires a phased approach. Introduce changes gradually to minimize disruptions. This approach ensures that the organization can adapt smoothly to the evolving logistics landscape.

5. Monitoring and KPIs.

Continuous monitoring is the heartbeat of a logistics strategy. Key Performance Indicators (KPIs) serve as the pulse, offering insights into the effectiveness of the strategy. Monitor metrics such as on-time delivery, order accuracy, and inventory turnover.

6. Continuous Improvement.

Continuous improvement is not a one-time effort but an ongoing process. Stay attuned to industry trends, technological advancements, and evolving customer expectations to refine and adapt the logistics strategy.

Related blog: 12 Essential 3PL Sales KPIs to Increase Revenues & Profits

A strong logistics strategy is vital for success in the dynamic world of Third-Party Logistics (3PL) companies. As you improve your 3PL logistics strategy, assess your current approach in relation to the discussed principles and components. If you already have a logistics plan, this sets your business as a pioneer in the dynamic logistics environment. Proactively integrate cutting-edge technologies and industry best practices to stay ahead of the competition. Cultivate a culture of technological evolution within your organization, promoting continuous improvement and innovation.

For you to become a leader in the 3PL sector, we have created a CRM built specifically for logistics service providers. You can request a demo here.

Thank you for reading our article. For more educational content, you can explore all our blogs here . Follow us on LinkedIn , Twitter , or Facebook for supply chain industry trends and efficiency tips. If you have other inquiries or suggestions, do not hesitate to contact us through this link.

ABOUT AUTHOR

Hector is IFS’s co-founder and CEO, with over 21 years of experience leading and managing companies and IT operations for large and mid-size businesses. Hector is also the co-founder and CEO of Cyzerg, a technology company specializing in innovating software solutions for warehouses and DCs. Before IFS and Cyzerg, Hector was senior director of technical operations, overseeing an e-commerce website with more than one million monthly transactions.

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3PL: A Guide to Third-Party Logistics for Business Owners

A 3PL can manage your business’s entire logistics, alleviating stress and simplifying operations. Find out how they work here.

third-party-logistics-guide

Instead of leaving your logistics to a third-party provider, manage shipping and delivery yourself with the help of Circuit for Teams .

Logistics is a big job — especially for eCommerce stores.

Logistics refers to the process of managing, storing, and transporting goods to customers, covering everything from packaging products to shipping them from point A to point B.

Don’t have the time, money, energy, or resources to handle logistics yourself?

What exactly is third-party logistics, and (more importantly) how do you use it effectively?

Below, I’ll cover the benefits of third-party logistics, explain why this might appeal to you, and detail what to look for in a 3PL provider.

I’ll also get candid about some of the cons of 3PL services and talk about managing your own logistics and deliveries using a “1PL” model.

Circuit for Teams is a simple software for optimizing routes with multiple drivers. Click here to start your free 14-day trial.

What is third-party logistics?

3PL stands for “third-party logistics,” the process of outsourcing logistics processes — including inventory management , warehousing , and order fulfillment — to a third-party service provider.

The popularity of third-party logistics is on the rise — in part because of the booming eCommerce industry. 

In the United States, the 3PL market is expected to grow at a rate of 6.9 percent through 2028, resulting in revenue of $362.8 billion .

But, before we dive further into third-party logistics, it’s useful to understand what we mean by “logistics.”

Logistics refers to the process you need to move products through the supply chain once a finished product is ready for sale. 

It covers steps like:

Warehousing

Warehousing refers to the storage of products before sending them to customers.

A warehouse holds products in bins or on pallets to keep them safe and secure. It’s the last point in the supply chain management journey before last-mile delivery , when you ship the product to the customer.

Learn more about warehousing .

Inventory management

Warehouses don’t just hold inventory. The goods inside the facility need to be tracked and organized.

Inventory management lets you improve your capacity planning so you know how much inventory you have, where it is, and when you need to order more.

This way, you’re never left short-handed during a customer order.

Picking and packing

What happens when a customer order arrives?

You need a person to identify the product, find it on the warehouse shelves (a process known as picking), and package it.

Companies like Amazon already use robots to automate parts of the picking and packing process.

Shipping and receiving

Warehouses often double as shipping and receiving centers.

They need to accept and store inbound products . When customer orders come in, the relevant products need to be prepared for shipping.

For example, the correct shipping labels need to be affixed to the package. You also must consider customs forms for international shipments.

Reverse logistics

As if all of the above isn’t enough work), you also need to consider reverse logistics .

This is basically the process of dealing with customer returns. 

Instead of organizing products to be sent OUT, you’re organizing them to be sent INTO your shipping facility or warehouse and processed.

So, that’s logistics in a nutshell. 

Third-party logistics covers all the same things, but YOU aren’t managing these processes yourself. 

You’ve outsourced them.

With third-party logistics, you hire another company to manage and oversee the various parts of the logistics process. 

How does third-party logistics work?

Sounds easy, right?

Well, no. Clearly, logistics is a complicated process involving a lot of steps and components. 

How can a third-party service provider make it easier for you?

It might seem way too complex to leave to someone else. 

Don’t stress. 3PL providers have clear processes in place to make collaborating easy (hey, there’s a reason they’re so popular).

Here’s how your relationship with a third-party logistics company might work:

3rd party logistics process

  • You send your inventory to the 3PL provider (or have your inventory shipped directly from the manufacturer to the 3PL provider).
  • The 3PL provider receives your inventory at one of their warehouses.
  • The 3PL provider assigns a unique SKU identifier to each type of inventory they receive. This will make it easier to find inventory later.
  • The 3PL organizes the inventory in its warehouse , making sure it’s safely and appropriately stored. For example, the 3PL provider will use a temperature-controlled warehouse for products needing refrigeration.
  • The 3PL is notified when a customer order arrives. There are different ways to do this. For example, you can manually forward orders to the 3PL or use software — like a tool that integrates with your online shop — to automatically forward the order.
  • Someone for the 3PL company identifies the inventory , finds it in the warehouse, and picks and packs it.
  • The 3PL uses the information from the customer order to print and affix the necessary shipping label. Alternatively, some 3PLs work with external shippers (like FedEx, UPS, or USPS) for this step.
  • The shipping carrier collects the customer’s package from the 3PL distribution center and takes care of last-mile delivery, getting the order into the customer’s hands.
  • Most modern 3PL providers have software systems that let you track each order. You can also offer tracking to customers with delivery time window notifications and real-time order updates.
  • The customer receives their order.

As you can see, 3PLs take a lot of hassle off your hands. All you have to do is focus on driving sales and getting customer orders.

Fulfilling those orders falls on the 3PL. 

So you don’t have to stress about devoting time and resources to this aspect of material handling (how goods are moved, stored, and protected throughout the supply chain).

What services do 3PL providers typically offer? 

As you can see from the steps described above, a 3PL partner is a comprehensive logistics services provider.

3PL is a step above second-party logistics (2PL), when a shipping company or courier simply collects a package — for example, from your business warehouse — and delivers it to the end company.

A 3PL service is more all-encompassing than a traditional freight broker or freight forwarder, which simply acts as a go-between for businesses and delivery drivers. 

They basically serve as matchmakers for brands and carriers. For example, a small eCommerce shop might use a 3PL provider because they don’t have the resources to manage shipping in-house.

The 3PL company will have the resources (like warehouse access) and skills (like proficiency with warehouse management and tracking software) to manage the eCommerce store’s storage and shipping needs.

Note: There are also fourth-party logistics (4PL) services, which coordinate between your business and the 3PLs you work with for order fulfillment. 

The 4PL can do extra things like negotiate contracts between you and the 3PL and act as a central point of communication between the 3PL and your business.

With a 4PL service, you basically outsource ALL of your logistics management, including communication with the warehouse and shipping providers. 

This includes coordinating with 3PL providers, inventory management, transportation, and even logistics technology management (like order tracking software).

4PL companies include Deliverr , ShipHero , and Shopify Fulfillment Network . You might want to work with a 4PL if you don’t have the bandwidth to deal with logistics or don’t want the hassle. 

4PL services are usually easy to scale up quickly.

That said, it can be frustrating not having any control over your logistics services. You won’t be able to address key issues like customer support and quality control.

If you want direct contact to the provider handling your logistics, a 3PL service is preferable. 

Here are the services you can expect from a third-party logistics provider:

Warehouse management

The 3PL has warehouse space to store your goods.

This can be a big boon since the warehousing market is getting increasingly competitive and expensive .

Instead of paying for and managing your own warehouse (which comes with added costs, like electricity and other utilities), you simply pay someone else to deal with it.

They can use a warehouse management system (WMS) to stay organized.

Inventory management.

3PLs don’t just stuff your goods into a warehouse. They make sure they’re properly identified, stored, and tracked.

Many 3PLs use inventory management software to organize items.

For example, inventory might have a unique barcode that’s scanned at various stages of the warehousing process, from receiving to packing and shipping.

Order fulfillment

When a customer order comes in, the 3PL takes care of order management and fulfillment services.

This involves picking products and packaging them.

You can use an order management system (OMS) to track inventory as it comes and goes, simplifying capacity planning.

The 3PL will know when more inventory is needed to keep sufficient stock on hand and meet customer demand.

You might be able to use the OMS, so you’re automatically notified when inventory levels are low and you need to get more stock to your 3PL.

Shipping management and order tracking

3PLs organize the dispatch, shipping, and tracking of orders from their warehouses.

They may have their own team to ship orders or work with established transportation services like FedEx, DHL, UPS, or USPS.

Reverse logistics operations

It’s not ideal, but it does happen: Customers want to return products.

A 3PL can also offer this service, known as reverse logistics.

3PLs can operate locally or internationally. It’s important to make sure you have a 3PL that covers the geographic area you need.

Note that different 3PL companies may offer different services. 

Always read the fine print regarding a company’s offering and what they will and won’t do before signing an agreement.

(Psst, don’t worry: I’ll go into more detail on how to vet 3PL providers and find the best one for you below).

3rd party logistics pros and cons

Pros and cons of using a third-party logistics provider

Now that you know what third-party logistics providers do, you’re probably wondering whether hiring one is worth it.

After all, this will add to your overhead expenses since you’ll have to pay for the service.

That said, not handling the stress of a logistics organization can be well worth the money!

Here’s a more detailed rundown of the advantages and disadvantages of third-party logistics, so you can decide whether it’s the right choice for you.

Pros of using third-party logistics 

When you work with a 3PL, you’re outsourcing your logistics needs to an expert in shipping and fulfillment. This has some key perks:

  • Simplify your business operations: When you don’t have to deal with the many facets of logistics (from warehousing to shipping), you have far fewer reasons to worry. Plus, without logistics distractions, you can focus on other core competencies, like marketing and product development.
  • Scale up quickly: A 3PL is also a great solution if your business is rapidly growing. They’ll already have the people, vehicles, and software tools needed to ship more products more quickly. You don’t have to worry about setting up the infrastructure to grow.
  • Alleviate stress: Managing logistics can be a huge headache. Leaving it to a 3PL alleviates this burden. The peace of mind alone can make a 3PL provider worth it.

Cons of using third-party logistics 

Working with 3PLs isn’t foolproof. There are some drawbacks to consider, such as:

  • The cost: You’ll have to pay a 3PL provider regular fees for operations, transportation, and warehousing (usually a monthly fee), plus upfront fees like setting up software integrations and a customer account. Further, some 3PLs have a minimum monthly usage/spend. In the end, it may not be the most cost-effective option for you.
  • Restricted hours: Some 3PL providers work 24/7. Others — usually the more cost-efficient options — have restricted hours. This can affect your business workflow by resulting in delayed deliveries and decreased customer satisfaction.
  • Lack of control: Working with a 3PL means you rely on them for fulfillment and delivery. This can be frustrating if you prefer to maintain oversight of your business. Lack of personal involvement also makes it harder to personalize the customer experience — for example, by adding a unique note to each package.

3rd party logistics truck

What to look for when choosing a 3PL provider

ECommerce businesses looking to hire a 3PL provider need to do their due diligence. There are a lot of options to choose from, and you want to make sure you’re paying for quality service.

Here are some points to consider when selecting a 3PL:

3PL providers can offer an array of services, from receiving inventory to storing and shipping it.

Make sure your prospective providers offer the services you need in the right geographic area. If you want reverse logistics services, ask if they offer them (and how much extra they’ll cost).

A 3PL will work for multiple customers — you won’t be the only one.

Come prepared with an estimate of how many orders you’ll need fulfilled and shipped over a certain period (you can look at your past business data for an idea) and make sure they can fulfill those needs.

Also, ask about their capacity to scale up. If your business grows and you have to send out double the orders, will they be able to keep up?

Shipping times

You don’t want customers waiting forever for products because your 3PL provider is lagging.

Ask for hard figures regarding average shipping times.

Also, ask about different shipping options. Do they offer expedited shipping (like 24- or 48-hour options)? Fast shipping is increasingly in demand, so this is a good perk to offer customers .

Let’s consider your bottom line.

How much will a 3PL cost you?

Ask for a detailed pricing table, including fees for onboarding, inventory receiving, warehouse storage, order picking and packing, packaging, and kitting (arranging a product in a certain way before shipping or assembling key components).

Finally, you must consider shipping costs . The 3PL should be able to show how they calculate shipping (such as by weight, size, and/or distance).

Questions to ask your 3PL provider 

Still unsure which 3PL distributor you should trust with your entire supply chain needs? Ask them these ten questions before signing on the dotted line:

  • Do you offer [service]? If there’s a specific service you need, like reverse logistics, ask whether they offer it.
  • How many warehouses do you have, and where are they located? This helps make sure they can handle your distribution needs. Also, ask if they have distribution centers in your high-volume business areas.
  • When do you operate? Are they 24/7, or do they have set hours? This will impact their ability to meet tight shipping deadlines. Also, ask if they work on weekends and holidays.
  • How does your pricing work? They should be able to give you a summary overview of costs, including onboarding, warehousing, and transportation.
  • What is your maximum capacity? This will help determine if they can handle your current capacity — and if they’ll be able to manage your orders if you scale up and expand in the future. You can also ask how many orders they currently manage per month to get a broader idea of their abilities.
  • How do you handle [24-hour] delivery? You can also ask about 48-hour or three-day delivery, for example. Make sure they have an expedited process for fast orders. Also, ask how they make up for delays (which can happen).
  • What kind of technology do you use? You want to make sure you can handle any software integrations without a steep learning curve.
  • What kind of reporting can I expect? Any reputable 3PL will maintain regular communications and offer reports with details like new orders, shipping notices, returns, and inventory counts. Find out which tools they use to measure these metrics and how often they’ll update you.
  • Can you offer references? A great 3PL should have testimonials from existing clients who are familiar with their services and can attest to their professionalism. 
  • Can I see a sample contract? Always ask for a draft contract and terms and conditions to review before signing. Also, see what other legal paperwork you may need to address, like a nondisclosure agreement.

3rd party logistics vehicles

Third-party logistics conclusion

Third-party logistics providers are becoming increasingly popular — and for good reasons.

With 3PL services, eCommerce companies can outsource essential logistics processes like warehousing, inventory management, picking and packing, shipping and receiving, and reverse logistics.

This can save business owners valuable time and stress, allowing them to focus on other aspects of the business (like customer acquisition, sales, and product development).

While they are convenient and can save time and hassle, third-party logistics companies have some drawbacks. 

They cost money and can add to operating expenses, for example.

Plus, some business owners might not like the idea of leaving their logistics in someone else’s hands.

The good news is that using a 3PL is only one option when it comes to order fulfillment.

There are alternatives — like having an in-house order fulfillment center.

Would you rather take a DIY approach? Set up a 1PL to deliver goods directly to the end customer and manage the entire last-mile supply chain.

The benefit?

This lets you maintain total control of your fulfillment process, shipping, and last-mile delivery, which can bring you peace of mind. 

That said, setting up your own shipping services involves some careful planning. 

You’ll have to hire a reliable team of delivery drivers , purchase the right vehicles , and invest in the right software tools to organize and track deliveries.

One must-have tool for any business setting up its own shipping services? Circuit for Teams .

Circuit for Teams is a route optimization tool that charts the fastest sequence of delivery stops for you. 

Simply add the delivery addresses and Circuit for Teams plans the route, taking into account hurdles like construction sites and traffic jams.

By charting the most efficient routes for you, Circuit for Teams can also save your business money. 

For example, by avoiding traffic jams, your drivers will avoid idling and use less fuel — one way to boost transportation cost savings .

Circuit for Teams also lets you set delivery time windows, send customers estimated times of arrival (ETAs), and track package progress in real time. 

Plus, it has perks for drivers, like a proof-of-delivery feature, so your team can prove that they’ve done their job.

About the author

Heather Reinblatt

Heather Reinblatt is a managing editor currently living in St. Louis, Missouri. She spends her free time reading, trying new recipes, and cuddling her cat Paisley. You can find Heather on LinkedIn .

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The Ultimate Guide to 3PL provider for Logistics and Supply-Chain

Anshuman Gupta

According to reports, the global logistics market is estimated to be at 1v2% of the global GDP in 2018. This comes as no surprise as an efficient logistics system is essential to run any successful business or organization which deals with products. Key factors like business type, scale, feasibility, efficiency among others are considered whether an organization chooses to manage the logistics for their entire operation internally or outsource it to companies that specialize in logistical and supply-chain operations.

3pl logistics business plan

What is Third-Party Logistics (3PL)?

Third-Party Logistics or 3PL is essentially when a business outsources the distribution, warehousing and fulfilment of their products to an external logistics company which carries out these processes efficiently on behalf of the business.

3pl logistics business plan

The most appropriate example of a 3PL logistics provider is Amazon . Think of all the businesses that sell their product on Amazon’s website as individual businesses that produce goods. Customers make purchases from these businesses via Amazon’s website. Once a purchase has been made the entire process of collecting the goods from the seller to deliver it to the customer who purchased it is Amazon’s responsibility.

Step 1: Inventory Management and Warehousing

A business B ships their products to Amazon any of amazon’s warehouses based on their geographical location.

Step 2: Distribution and Packaging

Once a purchase has been made by a customer from business B , the business is notified, the order is processed & packaged in their warehouse ready to be shipped.

Step 3: Fulfilment and Delivery

The order is shipped from the warehouse through their network of fulfilment centers eventually to the end customer. A 3PL logistics system is more consumer-oriented. It relies on the expertise and network of these logistics solutions providers to make a business’ supply-chain process much more efficient and cost-effective.

3pl logistics business plan

Why did businesses shift to 3PL providers?

The growing consumer demands require a more customer-centric logistics service

Production of goods has increased over the years to match the rising demand from consumers resulting. This led to businesses being unable to manage the production and transport of the goods efficiently. The biggest challenge came from E-commerce, that led to a never-seen-before demand for goods, especially in the retail sector.

People began purchasing goods in record numbers from tens of thousands of websites and marketplaces. Millions of orders and returns being processed every day. Although this was good for business for thousands of companies doing business online, it also presented the following set of challenges when it came to managing the logistics and supply chain of such volumes.

High Consumer Demand made logistics difficult to manage

A surge in demand for goods made it difficult for businesses to manufacture and manage the logistics of the goods as well. As a result, First-Party logistics (1PL) became unsustainable and businesses moved towards Second-Party logistics, i.e. outsourcing transportation to couriers services.

Warehousing and Storage became expensive

To stay competitive businesses needed to produce and maintain a large stock of goods to meet demand which required businesses to purchase or rent more physical warehouses and storage units across their delivery region. This led to a very high cost being incurred by businesses on warehousing and storages which became unsustainable for many businesses.

E-commerce offering free delivery reduced profits

With the rise in the number of e-commerce websites and online sales, many businesses and marketplaces started offering free shipping and delivery which were being borne by businesses cutting into their profits. Consumers became habitual to being offered free shipping and thus it became a trend which drove the cost of logistics for businesses even further.

Faster Shipping and Delivery became unsustainable for 2PL

Fast shipping and delivery required a more integrated form of logistics service which was more on-demand in nature. Businesses with 2PL providers were not equipped to deal with such an advanced system of supply-chain thus leading to adaptation of a more consumer-focused system of logistics.

Fleet Management became impossible

Maintaining and operating a large fleet is a cost-intensive affair. Businesses that own and operate their fleet for their supply-chain drain a lot of money to keep up with the increasing demand. Using a 3PL provider meant the logistics being taken care of by specialized companies with the most advanced fleet management technology, thus reducing overall operating cost for businesses considerably.

Failure in adapting rapid technological changes

Supply-chain is an ever-evolving industry with rapid technological changes. Being up-to-date with technological trends gets difficult for businesses whose primary focus is their products and that results in losing out to competitors.

Production vs Logistics

Logistics and Supply Chain Management for a business that sells a product is a large operation. As businesses grow and their logistics demands increase it becomes impossible to improve and manage both manufacturing and logistics which results in outsourcing of logistics operations.

3pl logistics business plan

Benefits of using a 3PL provider

3PL system of supply-chain helps tackles modern problems in supply-chain with technology

As a company grows the cost of maintaining warehouses, shipping goods, faster fulfilment, etc grows with it. Being able to offload your entire logistics operation to a 3PL provider reduces a company’s overall operating cost as the provider takes care of warehousing, packaging, fulfilment and distribution for the company. There are various other reasons why a company chooses to outsource their logistics operations to 3PL providers, let’s have a look at a few important ones.

3PL saves businesses from incurring huge fixed capital

Warehousing and Transportation Management require large fixed capital and for most growing businesses, investing such a huge amount is simply not sustainable. 3PL providers have infrastructures in place as well as own large fleets as logistics solutions are their primary business. They leverage that to make logistics more efficient and accessible.

3PL offers flexibility in terms of volume based on demand

3PL offers various levels of services based on consumer’s demand. Retail oriented businesses, especially e-commerce, have varying demands based on the season. A business that runs their logistics would need to invest more in transport vehicles and warehouses during peak season which will not be underutilized and expensive. 3PL offers on-demand service and cost flexibility based on the requirement which can save businesses huge operating costs.

3PL offers excellent customer service and experience-based solutions

3PL providers are their industry’s experts with years of experience in supply-chain management. As a result, they offer businesses reliable delivery time, better communication and tracking, minimum chances of poor packing and damaging as well as an overall improved customer experience in place to improve customer satisfaction and overall brand reliability.

3PL providers are up-to-date with the latest industry technology that improves efficiency

3PL provides companies that invest heavily in Research & Development to keep up with the latest technology which makes the logistics more efficient and cost-effective. They are early adopters of industry-leading technology in fleet management, navigation & tracking, fuel management among others which allows them to offer better and reliable services at very competitive prices that cannot be matched by 1PL or 2PL providers.

3PL providers eliminate compliance and regulatory issues for international transport for businesses

Businesses that wish to expand operations overseas or even source material from overseas run into regulatory, compliance and communication challenges different from their home country which could hinder their operation and result in heavy duties and fines. 3PL providers have a vast network and presence in countries across the globe which makes it easier for them to transport, delivery and even export goods across international borders without running into regulatory issues.

How to Choose the Right 3PL Provider for your Business

How to Choose the Right 3PL Provider for your Business

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The Anatomy of a Truck

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3pl logistics business plan

3PL Logistics Solutions Guide 2023: How to Plan and Manage Third-Party Logistics

3PL Logistics Solutions Guide 2023: How to Plan and Manage Third-Party Logistics

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What Are Third-Party Logistics (3PLs)?

What does a 3pl service provider do, why do businesses need multiple 3pl service providers, what are the key challenges in managing multiple 3pl partners, how can automation overcome the 3pl management challenges.

  • Recent Trends in 3PL Logistics Solutions
  • Unlock Operational Excellence and Efficiency With Shipsy’s Smart 3PL Logistics Solutions

Every enterprise today, e-commerce and otherwise, is on the lookout to ensure smooth, cost-effective, and time-bound delivery of products to customers. These factors are mainly attributed to fast-evolving consumer expectations, increased competition, and demand for quick supply and delivery. 

This creates a huge operational caveat for businesses in the form of cost-efficient, scalable and optimized delivery operations. This is where 3PL partners come into the picture. Robust 3PL logistics solutions guarantee sufficient flexibility and serviceability irrespective of geographical or time constraints. The global 3PL logistics (3PL) market is expected to grow with a CAGR of 8% and reach more than USD 1.75 trillion by 2026. 

However, hiring a 3PL partner is not child’s play. You have to factor in multiple considerations like regional presence, fleet type, and warehouse availability, to name a few.  

Below, we will explore the various aspects of 3PL logistics management, business necessity, the challenges involved, upcoming trends to keep an eye on, and more.

Third-party logistics (or 3PL) refers to the outsourcing of logistics processes, by an enterprise, to a third-party business for optimized deliveries. This primarily involves packaging, inventory management, warehousing, transportation, and order fulfillment on the part of the 3PL service provider.

3pl logistics business plan

Businesses outsource both inbound and outbound logistics to third-party logistics providers owing to their expertise and tech-enabled platforms. A 3PL service provider can be a single service provider, such as transportation or warehouse storage, or it can offer a systemwide bundle of services capable of handling more activities in supply chain management.

Next, we discuss the services offered by a 3PL provider.

The short answer is – third-party logistics solutions. A 3PL provider offers logistics for any other business and these logistics can be at any point in the supply chain. It can be used to transfer goods from the main manufacturing unit to a warehouse (first mile), from one warehouse to another (middle mile), and from the distribution hub or warehouse to the customers (last mile).

It might seem odd to hand over the operational control to an outside company, but this helps you, as a business, to focus on more critical goals.

Mentioned below are typical competencies handled by 3PL service providers:

Receiving 

The first step is getting inventory to 3PL for shipping and order fulfillment. To accomplish this, 3PL providers coordinate the inbound shipments with freight forwarders to manage the bulk shipments from the manufacturers to the distribution centers. Subsequently, the 3PL warehouse processes and stores products before they go out to the customers.

This step is initiated when a customer places an order. It is sent to the warehouse or fulfillment center where the seller’s inventory is stored. This is followed by identifying the location of products and picking them out of designated storage areas. 

As the types of orders vary in size, complexity, and pick type, the 3PL you decide to choose needs to support all types of orders. This is vital as an eCommerce or business-to-consumer (B2C) order is vastly different from a B2B one.

Once an order is ‘picked,’ the products are organized and prepared for packaging. 3PL logistics solutions can also work with the seller to identify the best way to package the product in a secure, presentable, and cost-effective manner. In addition, clear business rules for packing different orders are necessary to allow quick and precise fulfillment. The 3PL must have technological systems and operational processes in place to ensure that the orders are accurate and shipped at scale. This is paramount, especially during peak season.

Shipping can be the most complicated and expensive aspect of the fulfillment process. This is due to the involvement of factors like a large number of shippers, numerous shipping options per carrier, shipping cutoff times, and shipping locations. 

However, with the expertise of 3PL providers, you can benefit from an efficient shipping strategy, ensuring significant savings on shipping costs. This also helps ensure faster shipping speeds and a better overall fulfillment experience for customers.

Whatever the reason, returns are part of the shopping process. And have an impact on the customer experience. Therefore, 3PLs have a streamlined approach to processing return requests. They ensure hassle-free pick-up, document the receipt of those products, and communicate with the seller to identify what is to be done with the returned orders.

Now that we understand the broad workings of a 3PL service provider, let us move on to another critical question – Is having a single 3PL partner enough? Or, do businesses need multiple 3PL partners?

The answer is – Yes. Let us find out how.

Increasing Serviceability

Having a single 3PL might end up limiting your choice to carry out deliveries. It is possible that the 3PL service does not deliver to certain pin codes. With the last-mile delivery sector growing by leaps and bounds, you would not like to miss out on offering services to potential customers. Having multiple 3PL service providers allows you to extend the geographic reach of your products.

Ensuring Uptime for Delivery

Uptime is a measurement of reliability, generally expressed as a percentage of time the system has been working or is ready to use. Now, if you have employed only one 3PL provider, you are tied down by the availability of riders and vehicles of that particular service provider. 

During rush seasons, this may result in delays and failed deliveries. From a customer’s POV, the reliability of your brand would be severely diminished. Having multiple 3PL service providers ensures continued productivity, even during times of high demand.

Keeping Costs in Check

You might risk cost overruns with only one 3PL service provider. Firstly, you depend on a fixed set of vehicles and riders, who might be inefficiently utilized. Secondly, you do not have much choice regarding service costs and other charges. 

With multiple 3PL service providers available, you can easily select delivery partners based on pricing for each assignment. 

Offer Multiple Delivery Modes

Nowadays, multiple delivery options such as same-day, next-day, or express delivery are available for shoppers to choose from. And customers are increasingly being particular about the fulfillment of their preferred delivery type. 

With a single 3PL service provider, it might happen that, due to constraints, the customer’s preferred mode of delivery might not be feasible. This might result in a failed delivery or an angry customer. So, selecting multiple 3PL service providers allows you the flexibility to alter partners to suit the customer’s needs.

Customizable Delivery Options

Imagine you have to deliver perishable goods, but your lone 3PL service provider has no temperature-controlled transport. You surely will end up with damaged goods, which will mostly be returned. To avoid such incidents, it is better to have multiple 3PL service providers. 

This allows you easy access to specialized delivery options. Many businesses leverage IoT-based 3PL logistics solutions to keep track of container temperature and nearby weather conditions. 

In the following section, we will explore the various roadblocks in managing multiple 3PL service providers.

Control and Coordination

Outsourcing logistics to third parties means businesses lose a certain degree of operational control. So, they no longer have integrated 3PL logistics solutions to choose their own carrier, vehicle, rider, etc. it becomes even more complex if the 3PL service provider works with multiple parties. 

Having numerous people involved in even a single process increases instances of miscommunication, leading to disorganized deliveries and order movements.

Lack of Sync Due to Multiple Interfaces

Every carrier tends to have its own interface, and they keep upgrading the same: This requires constant efforts for businesses to keep up with their changes. While it helps ease the familiarization process for the carriers and their riders, as a business, you would have an uphill task of coordinating through different platforms.

API Integration Issues

Integrations with ERP (enterprise resource planning), WMS (warehouse management system) , and OMS (order management system) is essential to ensure a seamless connection between your as well as the 3PL logistics solutions. 

However, at times, APIs can be down or not fully functional. Maintaining API functionality takes engineering bandwidth, which might not be available among the in-house talent pool.

Multi-carrier management challenges

Inconsistent Communication with Customers

Multiple 3PL partners would mean multiple interfaces. One has to update the status to keep track of delivery fulfillment regularly. Missing out or delaying doing so would create an environment of opaque dealings. 

Moreover, businesses must have multiple modes of communication to contact the service provider and customers.

Instances that Require Manual Interventions

A major drawback of having multiple independent interfaces is that it becomes difficult to have everyone on the same page. This would mean logistics managers need to step in personally from time to time to resolve any issues related to riders or customer grievances. 

When handling thousands of orders, businesses need to switch between multiple 3PL logistics solutions, and this would result in significant wastage of time and derail efficiency. 

Non-Digitization of Billing

As third-party logistics solutions offer a wide range of services, it becomes challenging to consider ever-fluctuating rates, assorted billing methods, and varying SLA agreements. In the absence of digital billing, problems may arise in the form of disconnected data, human error, conflicting customer agreements, time delays, etc.  

Next, we discuss how investing in smart 3PL logistics solutions can help businesses overcome these challenges.

In an increasingly fast-moving world with competitive marketspace, automation is the key to success. AI/ML-powered 3PL logistics solutions can fundamentally streamline processes in terms of speed, accuracy, and competency across every operation involved with 3PL-based fulfillment.

Here are some of the most crucial ways automated 3PL logistics solutions can help businesses.

Improved Flexibility

Smart 3PL logistics solutions help businesses cater to multiple delivery types, such as same-day delivery, next-day delivery, time-bound delivery (2-hour, 90-minute, slotted and 10-minute delivery), and express delivery. Businesses working with multiple partners require smart integrated dashboards for managing, tracking, controlling, and monitoring operations.

Having flexible 3PL logistics software enables businesses to cater to diverse customer delivery demands while leveraging the carriers’ individual strengths. They can choose one carrier for hyperlocal deliveries and another one for same-day or next-day deliveries. 

Standardized Status Alerts to Designated Stakeholders

Automated 3PL logistics solutions can send trigger alerts for specific events to a specific set of persons. These triggers can be configured as well, to ensure rights-based access to the data or shipment information. 

This way, all the stakeholders are on the same page and can get access to the necessary data and shipment information as and when required. 

Access to Analytical Insights

A great benefit of automation is seamless access to data analytics, reporting, and data-driven actionable insights for smart business decision-making. This helps establish predictive patterns and offers insights for proactive decision-making. 

As a result, retailers can make well-informed business decisions to increase their revenue. Similarly, 3PL logistics solutions can help businesses use data analytics for rating, ranking, and prioritizing all the 3PL partners based on previous performance.

Ensuring Real-time Visibility

Automated 3PL logistics software provides real-time visibility into operations and order movement. This allows all stakeholders, including managers, service providers, retailers, and customers, to check the last mile order movement. As a result, businesses gain 360-degree visibility, control, monitoring, and tracking of order movements from start to finish.

Improved Operational Control

Intelligent 3PL logistics solutions enable businesses to control logistics operations at scale. Integrated dashboards compare and select 3PL service providers based on price, availability, performance, pricing, etc. In addition, documentation and functionalities, such as label generation, can be automatically created via the dashboard.

With this automation platform, even 3PL service providers can select optimization constraints to scale operations in a resource and cost-efficient manner.  

Multi-carrier management software

Automated Customer Communication

Automation streamlines milestone-specific alerts for designated stakeholders. As the ETA messages are sent before the start of delivery fulfillment runs, this ensures the availability of customers. 

As the communications are system generated, everyone involved, like the company, 3PL partner, rider, and customer, are on the same page. Moreover, due to the dynamic nature of the alerts, failed deliveries, delivery reattempts, and frauds can be easily verified.

Optimized Collaboration

3PL service providers with automated logistics systems benefit from the built-in APIs. It also helps integrate multiple avenues like eCommerce portals, customer portals, ERP, etc. This helps with steady business and smoother operations. With increased collaboration, process optimization and quicker suppliers’ onboarding is possible. 

Next, we discuss some of the recent trends in automated 3PL logistics solutions.

Recent Trends in 3PL Logistics Solutions 

Fulfillment as a service.

In the last few years, the number of eCommerce stores has multiplied. Platforms have removed many traditional barriers, allowing them to open a digital storefront in a matter of minutes in a cost-effective manner.

The fulfillment industry also followed suit. And rightly so. Fulfillment as a Service (FaaS) has gained favor among online sellers as it allows them access to resources of fulfillment service on-demand at a minimal cost.

Last Mile Delivery as Brand Differentiator

Getting your products to a customer’s doorstep in a fast-paced manner without hampering the business bottom line has never been more critical. Shoppers increasingly include this as a factor while making purchase decisions. Fast, efficient, and economical last-mile delivery has become the key to retaining customers and acquiring new ones. 

Increased Demand For Data Analytics

Today’s business decisions depend heavily on data and insights for informed decision-making. 3PL logistics solutions are increasingly offering advanced features like predictive analysis and product preference data to improve their business operations.

Also, customer data profiles have become essential to ensure a personalized experience for consumers.

Unlock Operational Excellence and Efficiency With Shipsy’s Smart 3PL Logistics Solutions

Shipsy is one of the most diverse, versatile, and scalable 3PL logistics solutions that offer AI-powered end-to-end logistics management solutions for multiple industries, including 3PL logistics management. The solution comes as a highly comprehensive platform with intelligent functionalities and hundreds of custom features to streamline and optimize the order delivery orchestration.

With intelligent data insights and automated yet flexible 3PL logistics processes management, Shipsy helps businesses achieve:

  • Ensure 100% error-free 3PL invoicing
  • Reduce last-mile delivery costs by 14%
  • Auto-allocate 99.7% of the delivery task
  • Reduce freight costs by 12%
  • Increase on-time dispatch by 28%
  • Reduce delivery steps by 77%

To know how Shipsy can help you achieve all this and much more with its smart 3PL logistics solution signup for a custom demo here. 

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What Is a 3PL? Everything You Need to Know

3pl logistics business plan

For most eCommerce businesses a Third-Party Logistics provider plays a crucial role in the success of their business. A Third-Party Logistics , commonly known as 3PL , refers to the outsourcing of logistics activities to an external service provider. A 3PL provider offers various services, including transportation, warehousing, distribution, inventory management, freight forwarding, and customs clearance. The 3PL provider acts as an intermediary between the company and its customers, handling the logistics operations on behalf of the company.

Importance of 3PL in eCommerce

There are many services a 3PL offers, however, let’s start with why you might consider a 3PL:

Add a logistics expert to your team . A 3PL provider specializes in logistics and supply chain management. They have the expertise and resources to optimize the movement of goods, streamline processes, and reduce shipping costs. This expertise can help eCommerce businesses operate more efficiently.

Scale Up and Down : Most eCommerce companies consider a 3PL to address issues with scalability. If your business is growing, repeatedly trading up to a larger space is difficult, disruptive, and expensive. 3PL providers offer scalability, allowing eCommerce businesses to adapt to fluctuations in demand. Whether it’s handling seasonal spikes or expanding into new markets, 3PLs can adjust their services to accommodate changing needs without significant investments in infrastructure.

Save Money : Outsourcing your logistics to a 3PL should result in cost savings for eCommerce businesses. 3PLs can efficiently execute your pick and pack needs, leverage their networks, negotiate better shipping rates, and optimize routes to reduce transportation costs. Additionally, businesses can avoid the capital expenses associated with owning and maintaining warehouses and transportation fleets.

Faster Shipping : 3PL providers often have multiple distribution centers strategically located, which can enable faster shipping and delivery to customers. This can lead to improved customer satisfaction and can be especially important for meeting customer expectations in the eCommerce space, where fast shipping is often a competitive advantage.

Focus on what you do best : An often-overlooked benefit is allowing you to focus on the core competencies that you are best suited for and will drive your business growth. By outsourcing logistics and supply chain management to a 3PL, eCommerce businesses can focus more on their core competencies, such as marketing, product development, and customer service, leading to business growth and innovation.

Reduce Risk : Most small businesses do not consider this advantage but a 3PL can help mitigate risks associated with supply chain disruptions, natural disasters, or unexpected events by having contingency plans and alternative logistics solutions in place.

Core Functions of a 3PL

The core functions of a Third-Party Logistics (3PL) provider vary by the need of the eCommerce business. It can encompass a range of services designed to manage various aspects of a company’s supply chain and logistics operations. It is important for an eCommerce company to understand what functions they need provided and to align those needs with the expertise of a 3PL. These functions will vary, but the primary core functions of a 3PL typically include:

Transportation Management : 3PLs handle the planning, execution, and optimization of transportation services. This includes selecting carriers, negotiating freight rates, managing routes, and ensuring on-time delivery.

Warehousing and Distribution : 3PLs often operate warehouses and distribution centers where they receive, store, and manage inventory. They can handle order fulfillment, packing, labeling, and shipping of products to customers or other distribution points.

Inventory Management : 3PLs use advanced inventory management systems to track stock levels, monitor product movement, and ensure optimal inventory turnover. They can help clients avoid overstocking and stockouts.

Order Fulfillment : This involves processing customer orders, picking products from the warehouse shelves, packing orders, and shipping them to customers. 3PLs may also handle returns and manage reverse logistics.

Customs and Compliance : For international operations, 3PLs can assist with customs documentation, compliance with trade regulations, and the management of import and export processes.

Supply Chain Visibility : Many 3PLs provide technology solutions that offer real-time visibility into the supply chain. This includes tracking shipments, monitoring inventory levels, and generating performance reports.

Packaging and Labeling : 3PLs can help optimize packaging and labeling to reduce shipping costs and ensure products are compliant with regulatory requirements.

Returns Management : Handling returned merchandise efficiently is a critical function for eCommerce businesses. 3PLs can process returns, inspect products, and restock or dispose of returned items, as necessary.

Value-Added Services : Depending on client requirements, 3PLs may offer value-added services such as kitting, assembly, quality control, labeling, and customization of products.

Transportation Brokerage : Some 3PLs act as transportation brokers, helping clients find the most cost-effective and efficient carriers for their shipments.

Vendor Compliance : 3PLs can work with suppliers to ensure that products meet quality and compliance standards before they enter the supply chain.

Demand Forecasting and Planning : Using data analytics, 3PLs can assist clients in forecasting demand, optimizing inventory levels, and planning for future growth.

Cost Analysis and Optimization : 3PLs often analyze supply chain costs and recommend strategies to optimize logistics operations, reduce expenses, and improve overall efficiency.

Risk Management : 3PLs may develop contingency plans and risk mitigation strategies to address supply chain disruptions and unforeseen events.

Technology Integration : Many 3PLs provide technology platforms and software that integrate with their clients’ systems for seamless communication, data sharing, and process automation.

The specific services offered by a 3PL can vary widely, and businesses often choose 3PL providers based on their unique logistics needs and goals. By outsourcing these core functions to a 3PL, companies can focus on their core competencies and rely on experts to manage and optimize their supply chain and logistics operations.

Examples of 3PLs

There are several well-known Third-Party Logistics (3PL) providers that cater to eCommerce businesses. These companies offer a range of logistics and supply chain services to help eCommerce companies manage their operations efficiently. Here are some examples of 3PL providers commonly used in eCommerce:

FedEx Fulfillment: FedEx Fulfillment is a 3PL service offered by FedEx, one of the world’s largest logistics companies. They provide warehousing, order fulfillment, and shipping services for eCommerce businesses, helping them reach customers quickly and efficiently.

UPS Supply Chain Solutions: UPS offers a suite of supply chain and logistics services, including warehousing, distribution, transportation, and returns management. UPS Supply Chain Solutions is designed to help eCommerce businesses streamline their operations.

DHL eCommerce: DHL eCommerce offers end-to-end eCommerce solutions, including warehousing, order fulfillment, cross-border shipping, and last-mile delivery. They focus on helping eCommerce businesses expand their global reach.

Speed Commerce: Speed Commerce is a 3PL provider designed specifically for eCommerce companies. They have several decades of experience and offer a network of warehousing and fulfillment services, including order fulfillment, inventory management, personalization, shipping services and a customer contact center to help businesses improve their shipping speed, accuracy, and customer satisfaction.

Red Stag Fulfillment: Red Stag Fulfillment focuses on providing high-quality, accurate order fulfillment services for eCommerce businesses, including kitting, packaging, and inventory management.

Fulfillment by Amazon (FBA): While not a traditional 3PL, Fulfillment by Amazon (FBA) is a popular fulfillment service for eCommerce sellers on Amazon’s platform. FBA allows sellers to store their products in Amazon’s fulfillment centers , and Amazon handles order processing, packing, and shipping to customers.

Quiet Logistics: Quiet Logistics specializes in eCommerce fulfillment for fashion and lifestyle brands. They offer order processing, inventory management, and returns processing services.

ShipStation: While ShipStation is primarily known as a shipping software platform, it also partners with 3PL providers to offer warehousing and fulfillment services. eCommerce businesses can integrate with ShipStation to access these services.

These are just a few examples of 3PL providers that cater to eCommerce businesses. The choice of a 3PL provider depends on the specific needs and goals of an eCommerce company, including factors like shipping volume, geographic reach, and the types of products being sold. It’s important for eCommerce businesses to evaluate their options and select a 3PL partner that aligns with their logistics and supply chain requirements.

How to Know if You’re Right For a 3PL

Determining whether your eCommerce business needs a Third-Party Logistics (3PL) provider involves evaluating various factors related to your operations, goals, and challenges. Here are some key indicators that suggest your eCommerce business may benefit from partnering with a 3PL:

People Requirements : If the amount of resources required to take care of your logistics needs outweighs the benefit and your long-term goal is not to do the warehousing portion of the business, consider a partner. Adding, personnel to manage a warehouse can be quite expensive and the added burden could derail your eCommerce plans.

Rapid Growth : If your eCommerce business is experiencing rapid growth in sales and order volume, managing logistics and fulfillment in-house may become overwhelming. A 3PL can help you scale your operations efficiently to meet increasing demand.

Inventory Management Challenges : If you struggle with inventory management, including stockouts or overstocking, a 3PL can offer advanced inventory control systems to optimize stock levels and reduce carrying costs.

Seasonal Peaks : If your business experiences seasonal spikes in sales (e.g., during holidays), a 3PL can provide the flexibility to handle increased order volume without the need to invest in temporary warehouse space and staff.

Complex Shipping Needs : If you sell products with diverse shipping requirements (e.g., different shipping carriers, speeds, or packaging), a 3PL can simplify the logistics process by managing these complexities for you.

Geographic Coverage : If you want to reach customers in multiple regions or countries, a 3PL with strategically located distribution centers can provide faster and cost-effective shipping options.

Fulfillment Efficiency : If order fulfillment and shipping are taking up too much of your time and resources, outsourcing to a 3PL can free you to focus on growing your eCommerce business.

High Shipping Costs : If you’re facing high shipping costs due to inefficient logistics practices, a 3PL can negotiate better shipping rates, optimize shipping routes, and reduce transportation expenses.

Returns Processing : If handling returns is a cumbersome process, a 3PL can manage returns efficiently, inspect returned items, restock them, or handle disposal as needed.

Technology and Data Insights : If you lack advanced technology tools for order tracking, inventory management, and supply chain visibility, a 3PL can provide access to such systems to enhance your operations.

Desire for Cost Savings : If you’re looking to reduce operational costs and avoid capital expenditures on warehousing and transportation infrastructure, a 3PL can offer cost-effective solutions.

Focus on Core Competencies : If you want to concentrate on your eCommerce core competencies, such as marketing, product development, and customer service, outsourcing logistics to a 3PL can help you achieve this focus.

Market Expansion : If you plan to enter new markets or expand your product offerings, a 3PL can help you adapt quickly to changing business requirements.

Customer Expectations : If customers demand fast and reliable shipping and delivery options, a 3PL can assist in meeting these expectations and enhancing the customer experience.

Risk Mitigation : If you want to minimize supply chain risks and be prepared for unexpected disruptions, a 3PL can develop contingency plans and provide alternative logistics solutions.

Before making a decision, it’s essential to thoroughly evaluate potential 3PL providers, consider their capabilities, costs, record, and assess how well they align with your eCommerce business’s specific needs and long-term objectives. Additionally, conducting a cost-benefit analysis to determine the financial impact of outsourcing logistics is advisable.

Advanced 3PL Services

Advanced Third-Party Logistics (3PL) services go beyond the basic functions of warehousing and order fulfillment. These services are often designed to provide more specialized, strategic, or value-added solutions to meet the unique needs of businesses in various industries. Advanced 3PL services can help companies optimize their supply chain, reduce costs, improve efficiency, and enhance customer service. Here are some examples of advanced 3PL services:

Demand Forecasting and Planning : Advanced 3PL providers use data analytics and forecasting tools to help clients predict demand patterns, optimize inventory levels, and plan for future inventory needs accurately.

Vendor Managed Inventory (VMI) : VMI is a service where the 3PL manages inventory levels at the client’s suppliers or manufacturing facilities. This ensures that the client has the right amount of inventory on hand while minimizing excess stock.

Just-in-Time (JIT) Inventory Management : JIT is a strategy that aims to minimize inventory holding costs by receiving and delivering products precisely when they are needed in the production or order fulfillment process. Advanced 3PLs can assist with JIT implementation.

Custom Packaging and Kitting : Some 3PLs offer custom packaging and kitting services, allowing clients to bundle products, create promotional kits, or customize packaging to meet specific marketing or customer requirements.

Quality Control and Inspection : Advanced 3PL providers may offer quality control services, including product inspection, testing, and compliance checks to ensure that products meet industry standards and customer expectations.

Value-Added Services (VAS) : VAS can include services such as labeling, re-packaging, product customization, and promotional inserts, which add value to products and enhance the customer experience.

Supply Chain Analytics : Advanced 3PLs provide data analytics and reporting tools to offer insights into supply chain performance, helping clients make informed decisions to optimize operations and reduce costs.

Temperature-Controlled Storage and Handling : For businesses dealing with temperature-sensitive goods, advanced 3PLs offer specialized facilities and equipment for storing and transporting products at specific temperature ranges.

Custom Software Integration : These providers can integrate their systems with clients’ existing software, such as eCommerce platforms, ERPs, and order management systems, to ensure seamless data exchange and process automation.

Global Trade and Compliance : Advanced 3PLs can navigate complex international trade regulations, provide customs brokerage services, and ensure compliance with import and export requirements.

Transportation Optimization : They can employ advanced routing and optimization algorithms to maximize transportation efficiency, reduce shipping costs, and minimize environmental impact.

Network Optimization : This involves strategically locating distribution centers and optimizing the network to reduce shipping distances and transit times, which can result in cost savings and improved service levels.

Advanced 3PL services are tailored to meet the specific needs and goals of businesses, whether they are looking to enhance their supply chain operations, improve customer service, or gain a competitive edge in their industry. These services are often customized to align with the unique challenges and requirements of each client.

How the integration process works

The integration process with a Third-Party Logistics (3PL) provider is a critical step in ensuring the smooth and efficient flow of information and operations between your business and the 3PL. It involves connecting your systems and processes with those of the 3PL to enable seamless communication and data exchange. Here’s how the integration process typically works:

Initial Consultation:

The integration process usually begins with an initial consultation between your business and the 3PL. During this meeting, you discuss your specific requirements, objectives, and expectations for the integration.

Assessment and Planning:

The 3PL will assess your current systems and processes, including your order management system (OMS), inventory management system, and any other relevant software or platforms.

A detailed integration plan is developed, outlining the scope of the integration, the data, and processes to be shared, and the timeline for implementation.

Data Mapping:

Data mapping involves identifying and mapping the data fields and formats used by your systems and the 3PL’s systems. This ensures that data can be translated and synchronized accurately.

API Integration:

Most integrations with 3PLs are achieved through Application Programming Interfaces (APIs). APIs allow different software systems to communicate and exchange data in real-time.

Your development team or software provider works with the 3PL’s IT team to set up the necessary API connections.

Common data exchanged through APIs includes orders, inventory levels, product information, shipping data, and tracking information.

Testing and Validation:

Before the integration goes live, thorough testing is conducted to ensure that data is flowing correctly between systems.

Test orders may be placed and monitored to verify that orders are received by the 3PL, inventory levels are updated accurately, and tracking information is provided.

Any issues or discrepancies discovered during testing are addressed and resolved.

Data Security and Compliance:

Security measures, including encryption and authentication, are put in place to protect the integrity and confidentiality of the data being exchanged.

Compliance with data protection and privacy regulations (e.g., GDPR, CCPA) is ensured, especially if personal customer data is involved.

Training and Documentation:

Training sessions are conducted for your team members to familiarize them with the integrated systems and processes.

Documentation, including integration manuals and troubleshooting guides, is provided to help your team navigate the integration effectively.

Go-Live and Monitoring:

Once testing is successful, the integration is officially launched.

Continuous monitoring and support are essential to identify and resolve any issues that may arise post-launch.

Optimization and Continuous Improvement:

Regularly review the integration’s performance and look for opportunities to optimize processes, improve efficiency, and address any evolving business needs.

Stay in communication with the 3PL to address any updates or changes that may impact the integration.

Scalability:

As your business grows or evolves, the integration should be scalable to accommodate changes in order volume, product lines, or other factors.

Effective integration with a 3PL is crucial for achieving operational efficiency, accurate order fulfillment, and improved customer service. It streamlines the logistics process and allows your eCommerce business to focus on core activities while leveraging the expertise and capabilities of the 3PL partner. Communication, collaboration, and ongoing maintenance are key to ensuring a successful and enduring integration with your 3PL provider.

Choosing the Right 3PL Provider

The best choice for your business depends on factors such as the complexity of your logistics operations, the need for end-to-end supply chain management, the level of control and visibility you desire, and the strategic alignment of logistics with your business objectives. Assessing these factors and conducting a thorough analysis of the benefits and considerations of each model will help you determine which option is better suited to your specific business needs. It may also be beneficial to consult with logistics experts or seek recommendations from industry peers. Not sure what questions to ask? After developing your “needs analysis,” review the questions in this blog post to assist in choosing the right 3PL partner. https://www.speedcommerce.com/insights/50-great-questions-to-ask-a-potential-fulfillment-provider/

3P Services vs Drop Shipping

Third-Party Logistics (3PL) services and dropshipping are both methods used by eCommerce businesses to manage their supply chain and order fulfillment processes, but they operate quite differently. Here’s a comparison of 3PL services and dropshipping:

Third-Party Logistics (3PL) Services:

Ownership of Inventory:

In 3PL services, you typically own and store your inventory in the 3PL provider’s warehouses or fulfillment centers . The 3PL manages the storage, picking, packing, and shipping of your products.

Inventory Management:

With 3PL, you have control over your inventory levels and can manage it based on your needs and demand forecasts. You can also customize packaging and branding.

Shipping and Fulfillment:

The 3PL provider handles shipping, order fulfillment, and often offers various shipping options to meet customer delivery expectations. You can negotiate shipping rates and optimize shipping routes.

Quality Control:

You can maintain control over quality control processes, ensuring that products meet your standards before they are shipped to customers.

Returns Management:

3PL providers typically offer returns management services, including inspecting, restocking, and processing returned items.

Customization and Branding:

You can customize the packaging and branding of your products to align with your brand’s identity.

Inventory Costs:

You are responsible for inventory holding costs, including storage fees, insurance, and potentially higher upfront investment in inventory.

3PL services can scale with your business as it grows, offering flexibility to handle fluctuations in order volume.

Dropshipping:

Inventory Ownership:

In dropshipping, you do not own or store inventory. Instead, you partner with suppliers or manufacturers who fulfill orders directly to customers.

You do not manage inventory levels or storage since the products are not physically in your possession. Inventory risks, such as overstocking or stockouts, are reduced.

Suppliers handle shipping and order fulfillment, which means you have less control over the speed and quality of the shipping process.

Quality control can be more challenging in dropshipping, as you rely on suppliers to maintain product quality and handle returns.

Returns are typically managed by suppliers, and the process may vary from one supplier to another.

Customization options may be limited in dropshipping, as you are selling products provided by suppliers. You may have less control over branding.

You do not incur inventory holding costs, as you only purchase products from suppliers when you make a sale.

Dropshipping is often seen as a more scalable model since you don’t need to invest in inventory upfront. However, it may have limitations if suppliers cannot meet increased demand.

The choice between 3PL services and dropshipping depends on your business goals, resources, and preferences. 3PL services offer greater control over inventory, branding, and quality but come with higher inventory costs. Dropshipping reduces upfront costs and inventory risks but may have limitations in terms of control and customization. Some businesses even use a combination of both models, depending on the products they sell and their overall business strategy.

Future Trends in 3PL

The logistics and supply chain industry, including third-party logistics (3PL) providers, is constantly evolving to meet the changing needs of businesses and consumers. Most of the key trends follow automation, artificial intelligence, and the use of data. Here are the ones expected to shape the future of 3PL services:

Advanced Technology Adoption :

Automation and Robotics: Increased use of automation, robotics, and autonomous vehicles for warehouse operations, order picking, and last-mile delivery to improve efficiency and reduce costs.

Internet of Things (IoT) : Utilizing IoT devices and sensors for real-time tracking and monitoring of shipments, inventory, and equipment.

Artificial Intelligence (AI) and Machine Learning : Implementing AI-driven predictive analytics to optimize routes, demand forecasting, and inventory management.

Blockchain : Using blockchain technology for transparent and secure supply chain management, particularly in areas like traceability and fraud prevention.

Customization and Personalization :

Offering more personalized and customized logistics solutions to meet the unique needs of different industries and customers.

Data Analytics :

Enhanced data analytics capabilities to provide actionable insights for optimizing supply chain operations, reducing costs, and improving service levels.

Last Mile Innovations :

Innovations in last-mile delivery, including the use of drones, electric vehicles, and urban micro-fulfillment centers to meet the growing demand for fast and efficient deliveries in urban areas.

Supply Chain Resilience :

Building more resilient supply chains to mitigate risks from disruptions such as natural disasters, geopolitical issues, and global health crises.

Reshoring and Nearshoring :

A trend toward reshoring or nearshoring manufacturing and sourcing activities to reduce supply chain vulnerabilities and improve control.

These trends are interconnected, and 3PL providers will need to adapt and embrace new technologies and strategies to stay competitive and meet the evolving needs of their clients in the coming years.

If you are looking for a 3PL with several decades of experience that understands the eCommerce business or if you are looking for additional information visit speedcommerce.com.

In summary, 3PL providers are instrumental in helping eCommerce businesses streamline operations, reduce costs, improve customer service, and expand their reach. They bring expertise, infrastructure, and scalability that can be essential for eCommerce companies aiming to stay competitive and grow in the ever-evolving online retail landscape.

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Working With a Third-Party Logistics Provider? Here Are 3 Key Steps to Ensure a Seamless and Successful Partnership. Effective communication, strategic partnerships and technology adoption are vital for successful collaborations between brands and their 3PLs.

By Mark Ang • Mar 27, 2024

Key Takeaways

  • Establishing transparent and regular communication with third-party logistics (3PL) providers is crucial for long-term success.
  • Brands should treat their 3PL as an integral part of their team to avoid inefficiencies and missed opportunities. This also leads to smoother operations and better customer experiences.
  • Leveraging technology offered by 3PLs can provide real-time insights and drive efficiency in operations.

Opinions expressed by Entrepreneur contributors are their own.

Brands spend major dollars making positive connections with customers. They seek out touch points to build awareness, create personalized experiences and establish emotional links that drive greater engagement, sales and loyalty. And they are well aware that every interaction counts.

Yet, amid this flurry of activity, there's one vital relationship brands may be overlooking that can make or break their entire customer connection: It's the partnership with their third-party logistics (3PL) provider.

Much like any successful relationship, this connection thrives on clear communication, mutual trust, compatibility and a deep understanding of each other's needs and objectives. It's not just up to a 3PL to make the relationship work — it's a collaborative path that leads to its success.

Going well beyond contractual agreements, here are the three essential strategies brands can employ to nurture a thriving 3PL partnership and enhance their customer experience:

Related: The 4 Key Tenets of Every Successful Partnership

1. Communicate openly and often

When a brand engages with a 3PL, establishing transparent and consistent communication is key to its long-term success. It starts during the evaluation phase when brands lay out their requirements and leads into the proposal phase when 3PLs share their core competencies. Before a partnership decision is even made, 3PLs should have their implementation plan mapped out, accounting for a brand's system integrations, inventory management, packing details and carrier preferences, among other leading factors.

Open communication shouldn't end with a service agreement. For a truly successful partnership, brands can't take a set-it-and-forget-it approach with their 3PL. They can make warehouse site visits, establish channels for communication and share vital information regularly. The same goes for 3PLs. They cannot simply take over warehousing, inventory management, picking and packing, shipping and delivery without understanding all the nuances of a brand's business, from a brand's identity and SOPs to its specific compliance requirements for order fulfillment. Each partner must be willing to go all in on communicating transparently, frequently sharing forecasting and sales data, providing visibility into inventory levels and discussing any issues, performance metrics and customer feedback that arise.

By fostering a strong collaborative relationship with their 3PL, brands can achieve efficient operations, transparent pricing aligned with expectations, and effective communication tailored to its unique needs. This alignment cultivates a positive customer experience, characterized by predictability and reliability.

2. Treat your 3PL as an extension of your brand

A successful 3PL-brand partnership goes beyond mere transactions. In the most successful partnerships , brands view their 3PL as a true extension of their team. This is an intentional process that takes more than simple collaboration. It requires a willingness from both brands and their 3PLs to integrate themselves into each other's business.

3PLs aren't typically experts in retail, but they are experts in getting products to shoppers. By relegating a 3PL to just operational tasks without integrating them into the broader strategic framework, brands can encounter inefficiencies and missed opportunities.

Take sales and promotions as an example. Say a brand has invested significant time and resources into launching a new product with a splashy ad campaign but didn't inform their 3PL partner of the expected upswing in inventory and sales. This will result in staffing shortages, fulfillment delays and disappointed shoppers. By leaving their 3PL in the dark, and not giving them the opportunity to prepare, the brand didn't support a successful partnership.

Communicating variances, whether it's new SKUs or expected volume fluctuations, is a simple way to bring the 3PL along for the journey. Brands and 3PLs can take it further by establishing a point of contact who regularly shares updates, discusses KPIs like dock-to-stock metrics or inventory and picking accuracy, and aligns their customer support programs to quickly resolve shopper issues.

Operating as an integral part of a brand's team gives 3PLs the flexibility needed to adapt their operation to address partner needs instead of imposing rigid, one-size-fits-all solutions.

Related: These are the Do's and Don'ts of Working With a Third Party Service Provider

3. Embrace 3PL technology and the visibility it provides

As retailers look for methods to improve their customer experience , 3PLs embracing technology are rising to the occasion to meet their needs.

It's not enough just to partner with tech-forward 3PLs, though. Brands need to go all in on the technology offered to stay competitive and meet the ever-evolving demands of their customers.

Various technology platforms, such as Order Management Systems (OMS), Warehouse Management Systems (WMS) and Transportation Management Systems (TMS), offer brands real-time insights into their 3PL, fulfillment and delivery operations, drive efficiency and offer visibility throughout their entire operation. What's more, a 3PL's automation, robotics and AI tools can boost productivity, reduce costs and enhance workforce experiences — leading to happier warehouse and delivery associates who perform better for brand partners.

Embracing technology and the 3PLs that adopt it, enhances operational efficiency and provides brands with the visibility they need to make informed decisions and proactively address customer needs, ultimately leading to a more seamless and satisfying shopping experience.

Related: How To Get the Most Out of External Partners

Maintaining open lines of communication, viewing 3PLs as a strategic partner rather than a service provider and embracing their technology are all key to forming successful partnerships.

With a strong 3PL relationship, brands can elevate their customer experience to drive brand loyalty and stay ahead of the curve in the increasingly competitive retail environment.

Entrepreneur Leadership Network® Contributor

CEO and Co-founder of GoBolt

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98 Top Logistics Startups & Companies (Moscow)

3pl logistics business plan

Avtoplanshet

Service that provides taxi passengers with a free tablet during the ride and advertisers get access to a new audience Based out of Moscow, Moscow City, Russian Federation

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Learn more about their finances on Crunchbase

R Group is a cargo, freight and logistics agency. Based out of Moscow, Moscow City, Russian Federation

United Europe Group

United Europe Group provides distribution, logistics, retail, development, and production services of perfumery and cosmetic products. Based out of Moscow, Moscow City, Russian Federation

Dilex offers a IT-platform for building effective transport logistics by cargo owners and carriers. Based out of Moscow, Moscow City, Russian Federation

Service for automatic online-stores logistics Based out of Moscow, Moscow City, Russian Federation

Beluga Projects Logistic

Beluga Projects Logistic is a logistics & transportation agency offering freight, warehouse logistics, outsourcing & consulting services. Based out of Moscow, Moscow City, Russian Federation

East-West company is a supplier of restaurants and confectionery industries. Based out of Moscow, Moscow City, Russian Federation

M&TM Freight

M&TM Freight offers local and international freight forwarding services. Based out of Moscow, Moscow City, Russian Federation

ZTM Logistic

ZTM Logistics as providing transportation delivery packing industries. Based out of Moscow, Moscow City, Russian Federation

MultiRoad is a digital logistics service company that offers freight forwarding, multimodal container logistics and transportation services. Based out of Moscow, Moscow City, Russian Federation

MUST Insurance

MUST Insurance is an insurance firm which provides logistics based carrier liability, driver accident, and cargo insurance products. Based out of Moscow, Moscow City, Russian Federation

Courier Service Express

Courier Service Express is a logistics company. Based out of Moscow, Moscow City, Russian Federation

FINDOSTAVKA

FINDOSTAVKA is 1st marketplace broker for the delivery of legally significant financial documents in Russia Based out of Moscow, Moscow City, Russian Federation

ROMAX FINE ART

Specialist White Glove Logistics Focused on High Value Furniture, Artwork and Antiques Based out of Moscow, Moscow City, Russian Federation

AAA Cargo offers railway, air, sea transportation and temperature-sensitive freight solutions for pharmaceuticals and clinical trials. Based out of Khimki, Moscow City, Russian Federation

Providing cloud fulfillment automation for small and mid-sized ecommerce companies. Based out of Moscow, Moscow City, Russian Federation

B2CPL is a logistics firm that provides cash service, courier delivery, packaging, and other services to e-commerce companies. Based out of Moscow, Moscow City, Russian Federation

Vig Trans offers international logistics, customs clearance, and legal support for foreign trade activities services. Based out of Moscow, Moscow City, Russian Federation

Transsertico

Transsertico is a freight company that offers customs clearance, cargo, logistics, certification, and foreign trade outsourcing services. Based out of Moscow, Moscow City, Russian Federation

UTLC ERA specializes in cargo transportation and logistics services. Based out of Moscow, Moscow City, Russian Federation

Fastdo offers an express delivery service in moscow that takes 90 minutes. Based out of Moscow, Moscow City, Russian Federation

CityVans provides transportation services for the packaging, labeling, and delivery of goods. Based out of Moscow, Moscow City, Russian Federation

Svetlana-K provides transportation, logistics, project management, and consulting services. Based out of Moscow, Moscow City, Russian Federation

Antares Trading

Antares Trading specializes in freight, warehouse, import, export, and trade services as well as provides transport and logistics solutions. Based out of Moscow, Moscow City, Russian Federation

Gruzhunter is a logistics company that provides local and regional transportation through cargo services. Based out of Moscow, Moscow City, Russian Federation

Gulliver & Co International

Gulliver & Co International is a management consulting firm that offers logistics, legal, IT, financial, and personnel management services. Based out of Moscow, Moscow City, Russian Federation

Rail Garant

Rail Garant offers transportation of goods, liquid cargo, cars, and construction materials through railways of the Russian Federation. Based out of Moscow, Moscow City, Russian Federation

Deliverator

SaaS for managing mobile workforce Based out of Moscow, Moscow City, Russian Federation

Garpix provides cargo space planning system inorder to distribute cargo in a container, truck on a pallet in 3D mode. Based out of Moscow, Moscow City, Russian Federation

LCM Express

LCM Express offers transportation, logistics, and courier service. Based out of Moscow, Moscow City, Russian Federation

ArmPack is a decentralized eco-system designed for protection against forgery. Based out of Moscow, Moscow City, Russian Federation

Major provides logistics, transportation, shipping, terminal handling, and cargo insurance services. Based out of Moscow, Moscow City, Russian Federation

Freight One

Freight One is a provider of cargo transportation services. Based out of Moscow, Moscow City, Russian Federation

STA Logistic

STA Logistic is a logistic and supply chain company. Based out of Moscow, Moscow City, Russian Federation

RFID Engineering

RFID Engineering develops and markets RFID solutions for various industries such as warehouse, production, logistics, and inventory control. Based out of Moscow, Moscow City, Russian Federation

KPD-Cargo is a logistics services provider based in Moscow. Based out of Moscow, Moscow City, Russian Federation

S2B Group is a web services providing firm that offers software services for automation of transport logistics and freight management. Based out of Moscow, Moscow City, Russian Federation

Traft is a logistics and cargo transportation firm that provides warehousing, audit services in transportation, and software solutions. Based out of Moscow, Moscow City, Russian Federation

Free Lines is a transportation and logistics company that imports clothes and furniture to various international destinations. Based out of Moscow, Moscow City, Russian Federation

BIOCARD is a pharmaceutical and logistics company. Based out of Moscow, Moscow City, Russian Federation

Sendie is a platform which offers people to ship goods, parcels and deliver them in flexible and affordable prices. Based out of Moscow, Moscow City, Russian Federation

Take'N'Go

Take'N'Go is a courier service company. Based out of Moscow, Moscow City, Russian Federation

dropnship.ru

Dropshipping online platform for suppliers. They receive a new sales channel, online stores and don't carry warehouse and logistics costs. Based out of Moscow, Moscow City, Russian Federation

Logistic tools

Logistics Tools provides a route planning & vehicle management software for the logistics industry. Based out of Moscow, Moscow City, Russian Federation

NAWINIA is a logistics and supply chain management company. Based out of Moscow, Moscow City, Russian Federation

Transport Development

Transport Development is a cargo, and freight service company. Based out of Moscow, Moscow City, Russian Federation

First Open-Community Logistics Platform Based out of Moscow, Moscow City, Russian Federation

WelShip LLC

WelShip.com is a free service that helps you find a carrier for your shipment. Based out of Moscow, Moscow City, Russian Federation

RTL is a provider of logistics and freight services. Based out of Moscow, Moscow City, Russian Federation

Extremely safe electric air vehicle (VTOL) Based out of Moscow, Moscow City, Russian Federation

Global Logistic Projects

Global Logistic Projects provides warehouse logistics and customs clearance services. Based out of Khimki, Moscow City, Russian Federation

Filuet provides professional contract logistics and BPO solutions to help foreign companies expand into the emerging markets. Based out of Moscow, Moscow City, Russian Federation

Russian Logistic Service

Russian Logistic Service provides full range of logistics services transportation, warehousing, custom clearance, certification, consulting. Based out of Moscow, Moscow City, Russian Federation

STS Logistics

STS Logistics provides warehouse logistics, forwarding and outsourcing services. Based out of Moscow, Moscow City, Russian Federation

Irbis is a supplier of Rescue equipment and machinery. Based out of Moscow, Moscow City, Russian Federation

Sovtransavto

Sovtransavto offers logistic and transport services, warehousing, insurance, cargo processing, and affiliated legal solutions. Based out of Moscow, Moscow City, Russian Federation

TENEX supplies nuclear fuel cycle and uranium products along with compliance and logistics services. Based out of Moscow, Moscow City, Russian Federation

UAV, drones, turbogenerators Based out of Moscow, Moscow City, Russian Federation

Mosgortrans

Mosgortrans is a transportation service provider company operating bus and electrical bus networks in Moscow. Based out of Moscow, Moscow City, Russian Federation

JSC Belomortrans

JSC Belomortrans offers trucking, air, sea, river and rail transportation, and warehousing services. Based out of Khimki, Moscow City, Russian Federation

CUBQ Transport and Logistics

CUBQ Transport and Logistics offer project transportation, bulky transportation and general cargo transportation services. Based out of Moscow, Moscow City, Russian Federation

Orfe is a 4 PL provider that offers comprehensive pharmaceutical and para-pharmaceutical logistics and warehouse services. Based out of Moscow, Moscow City, Russian Federation

Nipigas offers project management, equipment procurement, logistics, construction management, pre-commissioning, and documentation services. Based out of Moscow, Moscow City, Russian Federation

Pola Tech is a maritime company specializing in SaaS-based subscription solutions for voyage, deals, and fleet management Based out of Moscow, Moscow City, Russian Federation

INIER operates in the field of freight transportation to services on organization of transportation by air, road, rail, river. Based out of Moscow, Moscow City, Russian Federation

VVP Group deals with the distribution, logistics and warehousing of mobile phones, tablets, modems and related accessories. Based out of Khimki, Moscow City, Russian Federation

AI Eye is a driver monitoring app that automatically detects distracted driving and fatigue Based out of Moscow, Moscow City, Russian Federation

GetMeNow is a same-day delivery platform that enables its users to get products delivered in less than 90 minutes. Based out of Moscow, Moscow City, Russian Federation

Aviazapchast JSC

Aviazapchast is a foreign trade company specializing in the supply and after-sales service of domestic civilian & dual-use aircraft abroad. Based out of Moscow, Moscow City, Russian Federation

Volga-Dnepr Group

Volga-Dnepr Group is an air cargo company that provides transporters and scheduled cargo operations services. Based out of Moscow, Moscow City, Russian Federation

Pingdelivery

Collaborative Last-mile Delivery Platform. Get last-mile delivery seamlessly integrated with your business. Based out of Moscow, Moscow City, Russian Federation

SPSR-Express

Offers a broad range of services in relation to express delivery of documents, mail and cargo all over Russia and abroad Based out of Moscow, Moscow City, Russian Federation

The market-leading private Courier, Express and Parcel (CEP) operator in Russia Based out of Moscow, Moscow City, Russian Federation

Unitrade offers cargo, freight, and logistics services. Based out of Moscow, Moscow City, Russian Federation

Tablogix is an international logistics operator. Based out of Moscow, Moscow City, Russian Federation

Russian Container Company

Russian Container Company is involved in the container transportation such as railway logistics and also offers lease of freight cars. Based out of Moscow, Moscow City, Russian Federation

Rolf Group is a key automotive market player, importing and retailing of foreign cars with a full range of logistics services. Based out of Moscow, Moscow City, Russian Federation

United Shipbuilding Corporation

United Shipbuilding Corporation unites shipbuilding, repair, and maintenance subsidiaries in western and northern Russia Based out of Moscow, Moscow City, Russian Federation

MEGAPOLIS Group

MEGAPOLIS Group is a group of companies engaged in the distribution and logistics of tobacco products and other fast moving consumer goods. Based out of Moscow, Moscow City, Russian Federation

PickPoint operates the largest network of automated parcel lockers for “last mile” parcel delivery in Russia with over 2,000 locations Based out of Moscow, Moscow City, Russian Federation

GRUZOBZOR offers a cloud-based freight and truck matching service for b2b logistics. Based out of Moscow, Moscow City, Russian Federation

OTEKO Group

Asset-heavy multi-commodity logistics specialist active in CIS, Turkey and Europe with c. 3000 employees Based out of Moscow, Moscow City, Russian Federation

LookBox Pro

LookBox is an online style retailer of apparel using personal shoppers. Based out of Moscow, Moscow City, Russian Federation

Dakaitaowa is an exporting company. Based out of Moscow, Moscow City, Russian Federation

MOVER develops mobile logistics solutions for businesses and ordinary citizens. Based out of Moscow, Moscow City, Russian Federation

Tochka Rosta

Automates manual operations in sales and logistics: issuesand sends invoices, controls the payment terms and receipts. Based out of Moscow, Moscow City, Russian Federation

Box2Box provide excellent software for working with orders, as well as help with the API-integration! Shopkeepers. Based out of Moscow, Moscow City, Russian Federation

ExpressRMS creating an e-commerce service that takes care of all order processing issues. Based out of Moscow, Moscow City, Russian Federation

ABW Dynamics

ABW Dynamics provides solutions that enables private car owners to track where the car is. Based out of Moscow, Moscow City, Russian Federation

Transneft is a Russian state-owned transport monopoly. Based out of Moscow, Moscow City, Russian Federation

Learn more about their finances on Crunchbase ‍

GroozGo is online trucking service that instantly matches and connects shipments with loads with full responsibility for cargo safety. Based out of Moscow, Moscow City, Russian Federation

Service SaveTime provides delivery service of goods to customers. Based out of Moscow, Moscow City, Russian Federation

QB is a self-storage facility for individuals and businesses. Based out of Moscow, Moscow City, Russian Federation

Fura is a digital transportation provider. Based out of Moscow, Moscow City, Russian Federation

Deliver is a digital B2B platform that organizes cargo transportation by providing large shippers with access to private carriers. Based out of Moscow, Moscow City, Russian Federation

Go Lama Go is a  Groceries delivery service. Based out of Moscow, Moscow City, Russian Federation

Beri Zaryad

Beri Zaryad provides powerbank sharing service. Based out of Moscow, Moscow City, Russian Federation

Checkbox is a packaging supplies & service centre in Moscow. Based out of Moscow, Moscow City, Russian Federation

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Broomfield is home to a range of established and new Logistics companies. With a strong foundation & a maturing regulatory space Broomfield offers a wide range of opportunities for Logistics companies. This list aims to showcase some of the top Logistics companies and startups in Broomfield focusing on companies with great track records, innovative products or huge future potential.

Distribution Center and 3PL Manager

Job posting for distribution center and 3pl manager at the little potato company.

PRIMARY FOCUS:

The DC and 3PL Manager in tandom with the Master Supply Planner, is responsible for all finished good supply planning and finished good management within our DC network. The DC and 3PL Manager executes supply plans for the distribution center network, incorporating business intelligence and forecast information gathered from demand planning, procurement, and other sources.

The DC and 3PL Manager is the integration point for manufacturing and demand planning to ensure on-time delivery to customers. The role requires analytical, and interpretive individual with strong process and systems skills as well as managing a team of DC and 3PL planners. It also requires working and communicating with multiple internal stake holders as well as with external stakeholders.

DUTIES AND RESPONSIBILITIES:

· Develop and maintain constructive and cooperative working relationships with all stakeholders.

· Evaluate and set safety stocks, through replenishment policies within ERP.

· Build efficient finished good transfers from the manufacturing facilities through to the 3PL network.

· Validate and run the Co-packer production process through ERP.

· Support the management of the (Pallet Company) program, maintaining proper uploads of in and out transactions.

· Oversee inbounds and outbound postings from the 3PL network, including verifying tags and quantities.

· Using the available dashboards to maintain and manage offsite inventory including:

o Balancing offsite inventory and update ERP to maintain accurate inventory across the 3PL network.

o Put pallet IDs on hold to reflect accurate inventory, follow up with the warehouse, and notify planners as needed.

o Monitor aging and obsolete inventory items and ensure each warehouse is following FIFO process.

o Request cycle counts and participate in the annual inventory audit.

o Investigate shipping discrepancies – Uncover the root cause of the OS&D (i.e. picking error, missed revision, customer receiving issue, etc.).

o Process NOCs/invoice only Sales order to log complaints responsible for order/pound fill metrics.

o Arrange for donation/disposal/auction of products as needed with warehouses.

o Adjust discrepancies in NAV and follow up with internal teams.

o Request weekly QC with warehouses weekly for items that are over 7 days old from receipt.

o Arrange QC prior to shipment to customers as necessary with offsites.

o Assist with returning products to inventory (RMA) process and tag management.

o Adjust pallet ID discrepancies for food safety and traceability.

· Ensuring proper and timely management and communication of customer’s supply issues and queries over the weekend.

· Lead regular meetings with 3PL team, reviewing KPIs/performance metrics including actions, WWWs and sharing of best practices.

· Support continuous improvement projects, including Lean, Six Sigma and Kaizen events.

· Other tasks or related duties as required by management team.

desired qualifications:

· Minimum of 5 years experience in a cross functional role within a supply chain position, with a small to medium sized company.

· Post-secondary education relating to Business/Logistics/Inventory Management.

· Supply Chain designations would be an asset (SPIM ASCM).

· Excellent supervisory and coaching skills

· Strong organizational, decision-making and communication skills.

· Ability to supervise effectively in a fast-paced environment.

· Demonstrates a strong sense of urgency and bias for action.

· Proficient with Excel.

KEY COMPETENCIES:

Knowledge A Distribution Manager should have knowledge of applicable regulations, health and safety, public safety and security, administration and management, transportation principles and methods, change management principles and methods, personnel and human resources, labor relations, mathematics, customer and personal service, and English language skills.

Skills A Distribution Manager should have the following skill sets: coordination, critical thinking, management of personnel

resources, speaking, judgment and decision making, social perceptiveness, complex problem solving, negotiation, time

management, and active listening.

KEY MEASURES OF SUCCESS:

· 30/90 day plan.

· Departmental KPIs.

· Order fill and pound fill tracking.

· Senior manager assessments.

Job Type: Full-time

  • Dental insurance
  • Health insurance
  • Life insurance
  • Paid time off
  • Vision insurance

Ability to Relocate:

  • DeForest, WI: Relocate before starting work (Required)

Work Location: In person

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Russian cargo carrier provides Moscow-Asia air bridge amid sanctions

Sanctions limit volga-dnepr logistics corridors to russian-built aircraft as lessors pursue boeing assets.

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Struggling to stay afloat in the face of crippling Western sanctions on Russia, all-cargo airline Volga-Dnepr has narrowed its scope of operation to supporting Russian supply chains’ access to Asia with only Russian-built heavy freighters.

The government of Moscow last month hired Volga-Dnepr to provide cargo transport to and from a handful of Asian and Middle Eastern nations, aboard its five Ilyushin-76TD-90 quad-engine jets, according to a statement shared with FreightWaves. The deal runs through the end of the year.

Volga-Dnepr also has a dozen Soviet-era An-124 super freighters in its fleet, which continue to operate on a limited basis for project logistics customers. In mid-March, the company shut down its two subsidiaries that rely on Boeing (NYSE: BA ) aircraft because of sanctions on its leased aircraft and the revocation of airworthiness certificates by aviation registries in Bermuda and Ireland.

The 9.5 billion rouble ($144 million) Moscow contract is part of the effort to maintain access to vital goods such as pharmaceuticals, medical devices, food, electronics, consumer goods, equipment and spare parts after Russia was cut off from a vast chunk of the global economy for its invasion of Ukraine. 

Volga-Dnepr will provide regular air cargo service to Moscow and other cities from China, India, the United Arab Emirates, Azerbaijan, Pakistan and Vietnam.

Co-founder Alexey Isaykin said the company is also thinking about expanding its fleet with the purchase of additional An-124 and Il-76 aircraft, which will keep manufacturing workers in the country’s beleaguered aviation industry employed.

“We are creating a new logistics corridor” for nearly everything Russia needs, said Moscow Mayor Sergey Sobyanin. 

Volga-Dnepr previously cooperated with the city’s transport department in 2020 to deliver personal protective equipment and other items for combating COVID-19.

The United States, European Union, Canada and other countries banned Russian aircraft from their airspace and airports after the invasion of Ukraine. The U.S. and EU also banned the transfer of parts and technology necessary to maintain aircraft from Boeing (NYSE: BA), Airbus and other manufacturers. Under U.S. export controls, Russian airlines must also obtain a license to conduct any flights with U.S.-origin aircraft. And the EU required aviation leasing companies to terminate their leases with Russian carriers. 

Volga-Dnepr’s scheduled airline AirBridgeCargo (ABC) is no longer flying its 17 Boeing 747 freighters, including 13 late-model 747-8s plus a Boeing 777 because of U.S. and European sanctions. Subsidiary Atran Airlines, which handled regional flights to Europe and Asia with four Boeing 737-400 and two 737-800 narrowbody aircraft, has also been grounded.

Earlier this month, CargoLogic Germany filed for bankruptcy protection as it looks for new investors so it can restart operations, according to a report by Simple Flying . The company, which focuses on the European express market with a fleet of four leased Boeing 737-400 standard freighters, is registered in the United Kingdom and owned by Isaykin, who holds dual citizenship in Russia and Cyprus. Sister company CargoLogicAir, based at London Stansted Airport, has also ceased operation. 

The elimination of Volga-Dnepr aircraft from the market has reduced air cargo capacity for shippers when supply remains tight because of COVID-reductions in passenger flights, preventing a steeper drop in rates as demand softens. 

Lessor sues to reclaim aircraft

AerCap, the world’s largest aircraft leasing company, last week sued Volga-Dnepr for $427 million for not returning eight Boeing aircraft, Law360 reported .

Volga-Dnepr allegedly told AerCap (NYSE: AER ) that it was attempting to return the planes but that it needed approval from Russian customs authorities, which it never got, according to the London filing reviewed by the publication. Volga-Dnepr has continued to use the planes in Russia while refusing to pay rent, AerCap charged.

The Kremlin essentially seized Western aircraft in retaliation for the sanctions with a law allowing Russian carriers to transfer Western-made aircraft to the Russian aviation registry and use the foreign aircraft to fly domestic routes. Under international law, aircraft must be deregistered from the original registry and owners must give permission before they can be placed on another registry.

Prior to the Russian invasion, Dublin-based Aercap had 135 aircraft on lease with Russian airlines, representing about 5% of its fleet by book value. The first-quarter report on May 17 confirmed the company recovered 22 aircraft that were outside of Russia when sanctions were imposed, but that 113 aircraft remain in the country. It took a $2.4 billion charge to completely write off assets in Russia and Ukraine. 

Aercap said it has submitted insurance claims for about $3.5 billion worth of aircraft and engines remaining in Russia. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

RECOMMENDED READING:

Russian takeover of foreign-owned aircraft portends higher lease rates

US targets Russian cargo airline Aviastar over sanctions violations

Volga-Dnepr freezes Boeing freighter operations over Russia sanctions

Sanctions squeeze Russian carrier Volga-Dnepr, air cargo capacity

' src=

Eric Kulisch

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