Third-party logistics (3PL) companies provide outsourced inventory management and fulfillment services that exceed what’s possible with traditional in-house capabilities. Firms can look to 3PLs to take over managing and shipping components, parts, and finished products, freeing up resources to focus on core competencies and activities.
The 3PL industry began developing in the 1970s as a way to help companies outsource their logistics needs. At the time, a handful of logistics visionaries drew attention to the idea of shifting from solely in-house operations to specialized third-party supply chain management services. These service providers used the expertise of vendors, shippers, and other resources to help streamline transport, warehousing, and inventory management in order to realize savings and incremental improvements.
Today, 3PL providers offer an expansive range of services, such as trucking, ocean and air transport, rail, third-party warehousing, inventory management, distribution, tracking and management of freight bills, order fulfillment, outbound delivery notification, manifesting, invoicing, and financial services.
The 3PL industry continues to expand rapidly, becoming increasingly complex and sophisticated as technology advances. Companies can now access real-time data regarding the flow of goods in their supply chain. This information is invaluable; it allows companies to track their performance and make appropriate adjustments to the way the products move through the supply chain.
Global growth in the supply chain industry has seen 3PLs taking on a more active role in managing not only the transport, warehousing and distribution of goods but also in the global sourcing mix, offering end-to-end solutions from factory to market shelf. 3PLs provide comprehensive services, such as package and mail services, order processing, labeling, parcel tracking, returns management and delivery performance analysis.
The advent of reverse logistic systems has provided new opportunities for 3PLs, offering solutions to effectively manage reverse supply chains. These include returns management, recycling and reconditioning services. As well as handling warehouse and transportation, 3PLs are now involved in the reverse flow of products, providing their expertise in reverse logistics, packaging, labeling and delivery.
It’s clear why 3PLs have become a valuable resource for companies looking to streamline their supply chains. With solutions ranging from transportation and warehousing to complex global sourcing and reverse logistics, 3PLs are well-equipped to manage even the most difficult of logistics operations. The expertise, efficiency, and scalability of 3PL services can help companies realizing significant cost savings and improved customer service.
