Business plan

Understanding 3PL Logistics

Third party logistics or 3PL is a logistics solution that is provided for e-commerce businesses. It is very important to have products delivered to customers in a timely manner in order to keep them satisfied with the service. Supply chain management can get increasingly complex when the business expands and there can be many issues in logistics that can affect your business negatively. 3PL is therefore introduced to ensure fast and efficient deliveries.

Many companies outsource their logistics requirements to other companies as it can be difficult to manage the supply chain in-house. The logistics solutions that 3PL provides include receiving the products, storing them safely in a warehouse, packing them to ensure no damage and shipping them quickly to the customer. They also provide inventory management services so that the business owner is notified when it provides more stock, procurement of certain materials, postponement packaging etc. These 3PL companies have been carrying out these services for a long time and therefore, they have the expertise and the materials to carry it out efficiently. While the basics of the services are the same when it comes to 3PL companies, there are certain differences in other services they provide. For example, some offer specialised services.

The 3PL company will handle the transportation of inventory and other materials between the warehouse and the manufacturing plants and between the company and the customers. There are freight forwarders involved in this depending on international delivery. The 3PL company will select which shipping company to use based on their relationship with the shipping company and provide a customised shipping strategy to the business. Tracking services will be included as well. Distribution, warehousing and fulfilment are basic services provided by 3PL. Fulfilment services include storage of inventory, selecting and packing, fulfilment, shipping and return of products. When the e-commerce company is operating at a larger scale, there are services such as accounting, controlling costs, management and tracking of inventory that are required. You need to ensure that you select a 3PL company that is able to scale with the growth of your business.

A 3PL company will control all warehouse operations and inventory. Outsourcing to a 3PL company can streamline your logistics services. When the control of fulfilment is by another company, you don’t need to worry about day to day operations leaving you free to concentrate on the primary business goals of the company. Basically, the process of a 3PL company is such that they will receive the inventory of the company and store it in a warehouse. They will contact a freight forwarder or a delivery company to organise the shipment from the manufacturing plant to the distribution centre. There are many warehouse management software options that are used to make this process easier. Once a customer places an order, the fulfilment process starts. The item is located in the warehouse and picked out of the storage and prepared for packing. The company will work with your business regarding the type of packaging and look at ways to reduce costs at this stage. There should be a guideline to pack all items depending on the size, shape and nature of the item. Once packed, the shipping process will start. The 3PL company is responsible for providing a cost-effective shipping strategy that is fast and efficient.

Donte Sutton
the authorDonte Sutton