Third Party Logistics
A third party logistics company , in short 3PL Company , is s a provider of outsourced logistics services. Logistic services covers anything that involves management of the way resources are moved to the areas where they are required.
While there’s definitely more many reasons why a company might look for a third party logistics provider here are a few reasons:
- To provide supply chain support to penetrate new regional markets or countries where your company doesn’t currently have a presence without the costs involved in such venture
- If you are a company whose business is seasonal in nature using a 3pl provider allows you to cut the operating costs.
- Increase on-time performance and increase efficiency with the management of your inventory by using a 3PL provider that has the technology and capability to deliver an effective solution.
- Take advantage of lower transportation rates provided by logistics firms that have buying power due to the volume of freight they deal with.
- Quickly build a multi-location distribution network with lower risk, without the significant capital investment associated with building out a network on your own.
- By using a 3PL provider, you can divert your resources to grow your business by engaging in new marketing strategies
Basic 3PL providers offer one or more of the following logistics solutions to its clients, with each service customized for the client based on their needs, product, and size:
Warehousing solutions
Transportation and Freight Services
Shipping/Distribution management
In a nutshell, A third party logistics company is an independent business that specializes in providing a specific type of service to a larger client. The majority of companies focus on one aspect of the supply chain such as shipping. The purpose of a third party logistics provider is to improve the efficiency of a client and to help control costs. This is done through the economics of scale.
