Notes

3PL - Does Your Organization Really Need a Logistics Provider?
In supply chain management and logistics, 3PL refers to a business that uses a third party to perform functions normally performed by the company. A 3PL performs these functions under contract. For example, a 3PL would act as a go-between for manufacturers and distributors. They would also act as a logistics consultant and ensure that all aspects of a distribution or logistics process are managed in the most efficient manner possible. 3PLs can also provide distribution and logistics training as well.

There are three main categories of services that a 3PL provides. The first is transportation and Logistics, which is the transportation of goods from point A to point B. The second is warehousing and storage, which is the storing of goods in temporary containers while they are undergoing processing or logistics processes. The third, and most widely used service, are fulfillment , which is the management and coordination of different aspects of the supply chain, from sourcing down to the delivery of goods to their ultimate destination.

Under the 3PL definition, a fulfillment provider offers a number of different services. The most common services are stock, reverse logistics, and transportation. All three of these are used interchangeably, but each of them provides slightly different aspects of the overall 3PL equation. Here are the three main categories of services provided by a fulfillment provider:

Stock services are the 3PLs first category, offering the company direct access to the inventory it owns. The benefit to this type of 3PL service is the ability to manage the inventory more effectively and efficiently by utilizing the knowledge and expertise of the entire organization. In-house supply chains are notoriously difficult to monitor, even with the most sophisticated software programs and logistics systems. A 3PL offers insight into how the company's inventory is managed, allowing it to better direct resources toward key activities and reduce waste. This allows the organization to operate more efficiently, improving both operations and productivity.

Reverse logistics refer to the provider's ability to transport products or materials from point A to point B. Under this service, a company doesn't have to invest in warehousing facilities or transportation trucks. Instead, 3PL providers handle the logistics of moving goods from point A to point B. Again, this frees up resources for internal functions, because they're no longer tied to the sourcing or distribution. The downside, however, is that the consumer often pays more for such services as they may be more difficult to track.

Both transportation and warehousing logistics fall under the broader realm of 3PL services. Under this category, a 3PL manages the movement of products or materials from point A to point B, as well as the delivery of the same items at point C. While transportation logistics may include trucking loads or vehicle route mapping, warehousing encompasses the full process from pickup to delivery. This allows the organization to improve its supply chain by streamlining operations and reducing wasted resources.

It's important to understand the services offered by your chosen 3PL provider, whether you're looking at nationwide, regional, or global logistical solutions. The 3PL company should be able to assist you in every possible way, ranging from consultation to shipment certification. Remember that 3PLs don't provide logistic services; instead, they provide 3PL partner companies who do. To get the best results, you should consider hiring a company that can handle all aspects of your logistics needs, including customizing order forms and managing your export/recevaluations. It should also be able to provide your business with expert advice on how to best utilize its services to the fullest.

If your organization is ready to expand its current logistics management solutions, it's time to think about how to save money and improve efficiency. Hiring a 3PL provider to help you streamline your operations is the perfect answer. You'll find 3PL providers willing to work with you to develop a comprehensive logistical strategy for your company. You'll also find that the fees required to outsource these services to a 3PL provider are much lower than employing in-house staff to deal with your logistics management needs. If you're ready to find a 3PL provider that will work with you, make sure you choose one that has a solid track record of providing third-party logistics management.
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