3PL - What Is Third Party Logistics?

3PL - What Is Third Party Logistics?

Third-party logistics (3PL) is a broad term used to describe outsourcing to another party important elements of product distribution, including transportation, storage, and order fulfillment. There is more than one type of third party logistics, but the goal of all of them is to create integrated operations to better manage yards, the distribution process, warehousing, and how your customers receive their products on time.

Outsourcing through 3PL

What Is Third Party Logistics?It is not unusual for many companies to outsource, even small businesses. A major problem with numerous contemporary companies is attempting to do everything themselves, which is impossible after a certain point because of the sheer amount of freight in transport.

This is especially true if you are trying to produce, order, ship, store, and deliver goods that you do not make yourself. For example, the fidget spinner craze encouraged many small businessmen and women to start ordering and selling these small toys en masse despite not being the manufacturers, which resulted in a lot of products moving from the initial producer to the seller and then to the buyer. Even if you make your own goods at a small workplace, it can still be beneficial to invest in 3PL for assistance.

Businesses can identify three different types of 3PL providers:
• The Standard 3PL Provider
• The Customer Adaptor
• The Customer Developer
• The Service Developer

The Types of Providers

What Is Third Party Logistics?The Standard 3PL Provider is the most basic of logistics businesses. This type of company will perform basic activities like picking, packing, warehousing, and distribution. Most of these companies do third party logistics in addition to a larger area of work like yard management.

A customer adaptor is a provider that is requested by a customer to take over the entire management process. This type of third party logistics is ideal for small companies who cannot afford to hire and train additional employees, or for business owners who struggle to develop their own system. The audience for this type of business is small and tends to be overshadowed by that of the service developer, who works with the customer while taking over the entire logistics function.

The second most popular type of 3PL provider is the service developer. The service developer offers advanced services designed to improve a business’s entire shipping process to improve the customer experience while making the entire system more efficient and developed. Sometimes small businesses can utilize this type of developer, but it is more common to see larger companies investing in service developers to attract more customers and keep better tabs on expansive inventories.

Some of the types of services a service developer could add include tracing and tracking, cross-docking, the creation of unique security systems, and the usage of special packaging. If you run a small business and are concerned about where your products are going, whether they are safe, and who has been moving them, then hiring a service developer is an excellent option.

When you visit a company like American Manufacturing Solutions, you receive the best in the industry for 3PL services to improve your shipping efficiency, contact us today to see how we can help your business grow through dedicated logistics services!