3PL, or third party logistics, is a way to outsource your logistics. This can be anything from shipping to management to transportation. It is also common for using a third party's warehouse services. It is a way for you to focus on what you need to focus on and let someone else handle the rest. This allows your company to grow because with 3PL now your hands are free.
The difference between third party logistics and second party logistics is that 3PL is part of the customer's complex arrangement of business, whereas 2PL is an on-demand service.
Fourth party logistics is when the team you're outsourcing doesn't have their own physical facilities. Rather, they come to manage facilities you already have.
Why Use 3PL
One of the main benefits of using 3PL is that it saves you money. If you don't have to run a warehouse, you're saving money and focusing on the parts of your business that you most enjoy, or need your attention. It also saves you time because you're worried about one less thing and don't have to handle any of the logistics- you can just hand them over and move onto greater things.
Another benefit is that the services may be greater than you would be able to supply yourself because a 3PL company may have greater resources and scale than you would. For example, if a publishing company uses a third party to ship books, they are able to just focus on making the books, and wouldn't have to run a shipping warehouse. Making and shipping the books would be an entirely different endeavor than just making the books.
3PL is also cheaper because you need to own less capital. You don't need to have your own warehouse or means of transportation.
Scaling Your Business with 3PL
It is great for scale. If you have your own warehouse and business slows down, you will be overstaffed and wasting space. If business booms beyond what you expect, your warehouse will be overextended. But if you're using a third party, their warehouse can handle the ups and downs of business.
You can focus on your main business goals. If you don't know much about the logistics of shipping, for example, you don't have to take the time to figure it out. You can just use third party logistics. The third party will specialize in what you need, meaning they will know exactly what they are doing and it will be done well.
Lastly, the third party will likely have a larger capacity than you would if you were to try to take care of the logistics on your own. For example, a shipping company can ship further and faster than just a shipping segment of a business.
At American Manufacturing Solutions, we handle all of your logistics needs, including packing, assembling, shipping, warehousing, and more. We have an ever-expanding amount of trucks and trailers. We help you get your products to the people who need them. To start focusing on what matters most in your business, and let us do the rest, contact us here.