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What Is 3PL?

November 30, 2020 3PL

Whether you’re a burgeoning e-commerce business, a retail company seeking cost-reduction solutions, or any other type of company with materials or products to transport or store, you may be wondering,  “What is 3PL?” Third-party logistics, or 3PL, is a service that allows companies to outsource operational logistics, warehousing and more. It provides end-to-end assistance in managing and moving your products and allows organizations to focus on their business while the pros handle the heavy lifting. Chemical and industrial companies and manufacturers that ship a range of materials — sometimes hazardous — are other great examples of companies that can rely on the expertise of 3PLs.

Why do 3PL services matter in the supply chain? By turning to a trusted 3rd-party logistics company, it’s possible to streamline operations, improve efficiencies, and ensure end-customers are satisfied with the delivery process. The investment in 3PL distribution could enhance outcomes and help your business deliver the very best while maximizing profit margins.

Comprehensive Logistics Service

The 3PL partner you choose should be based on the tasks and solutions you need to better manage your business. You’ll want a company that offers a range of services to meet your requirements from one end of the process to the other. Below are some of the capabilities you should consider when evaluating a 3rd-party logistics provider.

• Distribution and warehousing services: Only a handful of 3PL providers can handle contract services, chemical logistics, transportation, returns management, custom packaging, repacking and assembly, and more.

• Fulfillment: At the heart of moving product is fulfillment, and it is one of the most labor-intensive processes. It involves inventory management, retailer experience, returns management, advanced ship notice (ASN), and precise labeling and packaging. Whether you’re a B2C or B2B operation, make sure your 3PL provider can realize your fulfillment needs.

• Import and export abilities: Moving products around the world is a complex process, so it’s important to work with a company that has global reach and diverse experience. Consider establishing an international distribution strategy that could handle inbound and outbound shipping while providing significant cost-savings. Additionally, import/export services should have some sort of worldwide agent network; air, ocean, road, and rail solutions; and online tracking and tracing.

• Logistics technology: IIoT and smart technology is the future. Don’t get left behind with an outdated logistics provider. You’ll want cloud-based management solutions for every aspect of your supply chain that can improve efficiency and create true operational success. A component of this software might include a transportation management system (TMS), an order management system (OMS), and B2B Collaboration /EDI integration. A professional 3PL team can use data to create actionable intelligence that propels your operation forward.

• Transload services: Transload services can be improved with the right team behind you. Make sure you discuss how to ensure that your lead times remain accurate and loading and unloading rail cars is as efficient as possible. Plus, some providers might be able to reduce costs while also mitigating the environmental impact of rail transport across the country.

• Other Transportation: A global 3PL transportation network can be incredibly helpful for short- or long-distance shipments. Look for a company that can provide FTL, LTL, FCL, LCL, intermodal shipments, and more. These services should improve mobility and offer container drayage services, contract and spot rates, and brokerage capabilities. Additionally, claims management, dropped trailer skills, and temp controlled or expedited solutions are must-haves.

• Contract Services: When you outsource contract services to a trusted 3PL provider, you reap a number of benefits. Choose the warehousing services that best fit your needs. This may include import and export services, labor management, fulfillment, transportation, or warehousing and distribution — or a combination. The advantage of tailoring these services is that you only pay for what you need, saving time, money, and countless headaches.

The Benefits of Using a 3PL Provider

What is the real benefit of third-party logistics services? Many times, businesses do not have the time, opportunity, bandwidth, or funds to create the right combination of solutions to meet each of your needs. Let a capable 3PL provider take care of the details. Some advantages of a 3PL management company include:

• Cost reduction: Using a 3PL provider is one of the most important changes to make to reduce your costs. Most companies work with multiple customers, allowing them to lower costs and the impact on the environment as a whole.

• Scalable operations: Another key benefit to logistics services is that they can be amped up or down depending on the size of your company. Make changes to your logistics needs based on your specific needs. You’re likely to see less fluctuation in demand throughout the year with this flexibility.

• Advanced technology: Investing in and operating with the latest in logistics technology is not a priority for many companies. It is for a 3PL provider. Thus, you can leverage those advances through a 3PL that utilizes up-to-date warehouse management systems, transportation management systems, and API/EDI integrations.

• Less risk: Using a 3PL company should help you save money, but they also help you mitigate the risk of shipping delays and disruptions. These can be costly and often lead to significant downtime in your operations that could be avoided with a professional team managing your facility.

• Access to new markets: With 3PL services — especially global solutions — gain access to markets around the world and at home. You can test new audiences for your products without having to worry about the commitment and the costs that go with it.

• Better customer service: With the rise in online shopping, the consumer is closer to the logistics process than ever. However, this does not mean you can overlook the importance of quality customer service. With certain 3PL providers, your patrons can expect next-day or same-day shipping.

Which Industries Can Benefit From Third-Party Logistics Solutions?

There are some industries that may benefit more from outsourced 3PL services than others, including those businesses that work in:

• Building materials: Shore up changes in inventory availability by utilizing 3PL solutions for your building materials.

• Chemicals:  Utilize chemical logistics solutions to ensure compliance goals are always met, without incurring risks to employees or customers along the way.

• Electronics: One of the fastest-growing industries in the world, 3PL providers can facilitate solutions for all your electronics needs.

• Consumer products: Get your products from the warehouse shelves to the customer’s doorstep using dependable logistics solutions.

• Equipment and manufacturing: From powerful machines to heavy devices, managing this equipment is rarely easy to do. Let the professionals handle the entire process flawlessly.

Are You Ready for 3PL?

WSI provides a wide range of third-party logistics solutions. We work with companies of any industry and any size. Whatever you need, we can handle the details and heavy lifting. Take the first step. Contact WSI today for a consultation or to discuss the services we can provide.

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