3PL Fulfillment Services Can Help Your Business
3PL, also known as logistics Partnering, is a strategic business relationship that involves one or more third party logistics providers that offer a range of services tailored to meet the requirements of a specific company. The use of third party logistics services by companies helps them reduce operational costs, which in turn improves productivity. By outsourcing certain aspects of their supply chain, companies are able to improve customer service, customer satisfaction, as well as total cost savings. However, there are potential pitfalls when companies choose to hire third-party logistics suppliers. In this article, we will take a closer look at 3PL and what to consider before signing a contract with any provider.
What is 3PL? 3PL, or 3P Logistics Provider, is defined as any company that offers services for a third party logistics provider. These services may include inventory, warehousing and transportation services, and order fulfillment. To some, the use of 3PL companies may seem advantageous because they may be able to streamline their internal processes and cut operational expenses. By using 3PLs, businesses can also reduce their dependence on local or regional distributors, since they no longer need to maintain an inventory or have the logistics support in place to make the product available for sale.
However, there are disadvantages of choosing to utilize 3PLs as opposed to doing it internally. In the past, companies had to maintain separate warehouses and storage spaces to house and organize their inventory, and then hire or contract third-party logistics providers to fulfill orders. Often, the cost of fulfillment was double or triple the cost of inventory because it included service fees, import taxes, and other fees associated with shipping.
Moreover, it became more complicated to keep track of the inventory levels of different products throughout the supply chain. If one warehouse stored only a few items, it would become difficult to ensure the right quantities of a particular product throughout the entire supply chain. Because of this, it became necessary to conduct on-site inspections of each 3PL warehouse to ensure that the company was complying with applicable laws and regulations. In addition, it became costly to retain a third-party logistics provider to manage and operate a 3PL warehouse. It is for these reasons that many companies have decided to outsource their inventory management responsibilities to a 3PL warehouse management company.
There are many benefits of outsourcing 3PL responsibilities to a 3PL provider. For instance, these providers are able to offer a complete line of commercial and industrial equipment and materials, including trucks, trailers, forklifts, and material handling equipment. Furthermore, these companies can offer fulfillment services, including inventory management, order fulfillment, and pick and pack fulfillment. These services can improve a business's efficiency by significantly reducing delivery time and effectively reducing third-party logistics costs.
By outsourcing 3PL responsibilities, businesses will be taking full advantage of the capabilities and services of a reputable 3PL provider. There are numerous benefits of utilizing a 3PL provider for e-commerce logistics operations. First, it provides businesses with a cost-effective and convenient way to enhance their on-site physical property. In addition, 3PLs can provide a highly efficient and flexible resource for warehousing needs, including kitting, packing, and shipping.
An e-commerce logistics management provider is also ideal for companies that generate large volumes of products. For example, if a manufacturer processes several different kinds of orders at the same time, hiring a 3PL provider can help streamline operations and increase productivity. Also, a 3PL can handle the task of packing, loading, and transporting products without requiring one of their in-house employees to handle these tasks. Lastly, a 3PL can improve the quality and safety of a company's shipping and picking operations. By providing the resources of a 3PL, businesses can reduce shipping costs and provide their customers the highest quality and most convenient shipping option available.
In the retail industry, 3PL capabilities are especially important. By allowing a manufacturer to reduce manufacturing costs, a retailer can free up capital to invest in other aspects of the business or to hire additional staff. In addition, by using 3PL fulfillment services, e-commerce businesses can increase their ability to control their supply chain by streamlining logistics. Finally, by utilizing a 3PL company to fulfill order fulfillment requests and meet supply chain objectives, businesses can free up valuable resources to focus on customer service and other core marketing programs.