An Ultimate Guide to 3PL Basics

Customer happiness is a major goal for any business, whether a large e-commerce firm or one just starting, and nothing keeps a client happier than receiving their favourite products swiftly and effectively. The heart of any business is swiftly and affordably getting things into customers’ hands. Nevertheless, maintaining that supply chain becomes challenging and expensive when your company grows. Logistical errors can detract from the customer experience, slow your company’s expansion, and reduce profitability. Companies frequently outsource their fulfillment and logistical operations to the best logistics company to resolve several of these problems. The need for 3PL services has increased as a result of rising online sales and rising consumer demands for faster delivery and lower rates. As a business expands and encounters more challenging supply-chain management and logistical issues, outsourcing to a 3PL can have a positive impact.

A Brief Explanation on 3PL Services

Logistics for getting a company’s products to its customers are outsourced to third parties is called third-party logistics. 3PLs provide receiving, packaging, storage, and delivery services. As value-added services, several 3PL providers also offer additional logistical services. These encompass sourcing, kitting and assembly, postponed packing, and inventory management.


Since 3PL service providers have been performing logistics for years or decades, they have the knowledge and power to simplify, accelerate, and reduce the cost of the entire process for the seller. The market for third-party logistics providers has expanded exponentially with e-commerce. In addition, the growth of 3PLs has been facilitated by monitoring technologies like GPS and RFID, which provide more comprehensive supply chain visibility. Any best logistics company will use IoT technology to increase the tracking measures for trucks and other carriers.

An Overview of Different Types of 3PLs

Although the majority of 3PLs provide a range of services, some of them have areas of expertise. Among these functional domains, 3PLs concentrate on the following:



Inventory shipments between producers and your warehouse or between your business and customers are handled by 3PLs with transportation services. These include the shipping companies for small packages like FedEx, UPS, and USPS, as well as the freight forwarders who frequently move bulky items over international borders.


Distribution & Warehousing

Distribution and warehousing offer fundamental services like storage, pick-and-pack, shipping, fulfillment, and returns. This is the most prevalent 3PL, and sellers use it to outsource their delivery and storage requirements. Most of these 3PLs also handle the seller’s transportation, choosing the best shipper, managing the connection with the distributor, and optimizing the shipment plan.



These third-party logistics providers (3PLs), typically utilized by larger e-commerce businesses, optimize your logistics network by offering services like accounting and cost control, inventory tracking, freight forwarding and management, and other related tasks.

Elaborate Explanation on the Core Competencies of 3PL

It could appear to be a difficult and expensive procedure if you’ve never outsourced or managed a 3PL, but it doesn’t have to be, and it shouldn’t be. Giving control of the fulfillment process to an outside organization could also seem weird. However, partnering with a 3PL allows you to delegate all operational concerns to them, freeing you up to concentrate more on other elements of your logistics system and your primary business objectives.


The following sections show what a conventional 3PL might do for a seller in terms of fulfillment and provide value-added advantages that not all 3PLs provide.



The first step is to get inventory to the 3PL to fulfill orders and ship. Your company’s inventory will be sent to a 3PL warehouse, where it will be stored before being shipped to a client. A person or business that assists in managing and organizing mass shipments from the producer to the distribution centre is known as a freight forwarder. The 3PL will need to work with this company to manage the inbound shipments. Their warehouse management procedure includes this. A good 3PL should have integrated warehouse management software for this procedure to be simpler. In order to make it simple to complete orders and choose what to fulfill after an order has been placed, the program will determine where a product is housed and when it was deposited in storage.



The next action, known as choosing, takes place after a customer makes an order. The 3PL fulfillment process starts here. Orders are delivered to the warehouse where the seller’s inventory is kept, then picked out of storage after an order has been placed. The 3PL you choose must handle all order types because different order types have different sizes, levels of complexity, and pick types. For instance, a business-to-consumer (B2C) or e-commerce order differs greatly from a business-to-retailer order.



The products in an order are arranged and ready for packaging once chosen. During the initial setup phase, a 3PL will work with the vendor to determine the optimal packaging strategy to ensure the products are safe, attractive, and packed as cheaply as possible. Particularly during peak season or order times, the 3PL must have the essential operational procedures and technological systems to guarantee that the orders are precise and can be delivered at scale. To enable the orders to be fulfilled swiftly and precisely, it is vital to have clear business guidelines regarding how to pack various orders.



The most challenging and expensive part of the fulfillment process is shipping, and this is because there are many carriers, shipping options for each company, shipment deadlines, and shipping locations. A knowledgeable 3PL can implement a precise shipping strategy, offer significant cost savings, faster shipping times, and an excellent overall experience for the client receiving the goods.



Returns are a necessary element of the shopping experience, regardless of whether the item was ordered in error, was damaged in transit, or for other diverse reasons. A skilled 3PL ought to have a streamlined procedure for receiving goods, documenting that receipt, and setting up business guidelines with the vendor to determine what to do with returned orders.