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What is a 3PL and How Can It Help Your Business?

A simple guide to partnering with a 3PL provider.

January 14, 2019

Third party logistics (3PL) providers help simplify your warehousing, distribution, transportation & fulfillment needs — all while saving you time & money.

Let’s start by defining what a 3PL is:  According to TechTarget, a 3PL (Third Party Logistics) provider offers outsourced logistics services which encompass anything that involves the management of one or more facets of procurement and fulfillment activities.

Put simply, the main focus of a 3PL company is to provide services that optimize how your business handles its distribution and shipping operations. A 3PL can provide a single service — such as transportation or warehousing — or it can deliver a bundle of services that extend across multiple aspects of the business supply chain.

Serving as an extension of your business, 3PLs provide critical services that control your warehousing, distribution, transportation, and fulfillment needs. Using a 3PL could eliminate the need to invest in warehouse space, information technology, fleets and transportation services, and the manpower to carry out your logistics processes, thus allowing you to focus your time and efforts on core competencies.

Key Benefits of Partnering with a 3PL:

Instead of having to hire staff to manage orders and shipments, a 3PL will ensure your products are delivered to your customers as quickly as possible.

Better Customer Service

Order fulfillment is critically important in today’s competitive online marketplace. How fast the turnaround of an order is from when it is received to when the product is delivered goes a long way in increasing the likelihood of repeat business. A 3PL can save you time by automating fulfillment. A 3PL utilizes information technology to manage e-commerce, customer relationships, transportation, and warehouse operations. Instead of having to hire staff to manage orders and shipments, a 3PL will ensure your products are in your customer’s satisfied hands as quickly as possible — no headaches required.

Seasonal Flexibility

Some businesses have seasonal fluctuations in product demand. Because a 3PL’s services are customized to your needs, you can take advantage of the flexibility and cost savings of seasonal scalability. For example, if your company sells sunscreen, your prime selling season would naturally be during the summer months. By contracting with a 3PL, you’re able to ramp up your distribution and transportation efforts during your busy season and then reduce the size of your distribution and warehouse needs in the off-season months, when you have less inventory.

Focused Technical Expertise

3PL providers are experts in understanding the many challenges and complexities of fulfillment, warehousing, and shipping. They keep abreast of all the latest trends and emerging technologies within the logistics industry, and constantly upgrade software, hardware, and equipment in order to help clients better manage their inventory and streamline their processes. Also, because 3PL providers have a large resource network, this helps your business to be more efficient in every area of the logistics process.

Simplified Global Shipping

International shipping can be complicated and worrisome. A 3PL knows the ins and outs of fulfillment and can take over the documentation, customs, duties, and other issues that occur when dealing with international sales. A 3PL is knowledgeable in all the trade compliance requirements to make selling and shipping in another country easier and can even provide services like freight forwarding and consolidation to lower your shipping costs and assure deliveries are expedited.

The End Result: Added Value

According to Transportfolio, 3PLs create value in ways that enhance your operational, financial, and end customer performance. 3PLs are there to provide whatever services you need within the supply chain process, to assure that your products are shipped and received on time, to save you time and money, and to allow you to focus your resources and efforts in your core competencies. They do their job, so you can do yours.

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