3PL Logistics: Third-party Logistics & its Major Functions

 

Third-party logistics operations include warehousing, inventory control, and order fulfillment facilities. They are the center of the supply chain. The receiving, storage, and shipping of merchandise are essential elements for the growth of firms that rely on these logistics businesses. The outsourcing of these specific responsibilities has fallen to third-party warehouse companies known as 3PLs or third-party logistics warehouses. Let us talk about precisely what a 3PL is and its functions. 

What is 3PL Logistics?

The supply chain and logistics functions of a corporation are handled by an outsourced organization known as a third-party logistics warehouse or 3PL. In a nutshell, 3PLs are utilized to outsource the warehouse and distribution needs of third parties for the inventory and fulfillment services of their customers. 

In addition to managing their own inventory, 3PL warehouses often stock, keep, and ship the goods of other companies or other enterprises. They are considered a hybrid 3PL if they process and store orders for both their own company and clients. 

Major Functions of 3PL Logistics

The following crucial tasks are handled by 3PL providers when managing your logistics- 

1.     Warehousing 

In a 3PL warehouse, the process of accepting incoming items and storing them in a secure area is referred to as receiving inventory. Your products and inventory will be shipped to the 3PL's warehouse, per their arrangement. They will store your items on your behalf and handle all the logistics of managing and organizing them. Each 3PL has a unique combination of processes and storage facilities for receiving and holding inventory. 

2.     Distribution 

Additional distribution and wholesale services offered by many 3PL companies include outbound order fulfillment, custom labeling, picking and packing, and manufacturing. 

Your Third-Party Logistics partner will pick the items for the order when you receive one and arrange them for each consumer. 

3.     Transportation 

The next step in the supply chain is shipping your order. Your third-party logistics supplier is in charge of managing the delivery of your orders to your clients. Your 3PL partner makes sure that your orders are properly labeled and delivered to your customers in the way of their choice thanks to its agreements with a variety of carriers. 

4.     Reverse Logistics 

Reverse logistics and return processing services are offered by many third-party logistics providers. If a consumer returns an order by shipping it back to the 3PL, the 3PL will process the return and, based on their policies and your preferences, either resupply the item or dispose of it. 

5.     Consolidation 

One of the many tasks carried out by a third-party logistics supplier is consolidation. Ecommerce sellers frequently send a number of tiny things to the same location. Shipping expenses are greatly decreased if all the small items are combined into one package. A consolidation service provider is a company that sends numerous tiny goods as a single larger package. Consolidating cargo or freight is another name for it. 

Is It Worth Investing in Third-party logistics?

Third-Party warehouses are built to be as effective and quick as possible in order to handle growing volume as your company grows. A 3PL provider can come up with plans to cut your shipping expenses and delivery timeframes. As a result, you gain from their knowledge and skills when you hire a 3PL provider to manage your eCommerce fulfillment.

Summary

3PLs provide a broad range of expertise that is unavailable without the right contacts and years of relevant industry experience. They are able to bundle many 3PL services into a single offer and house them all together. A 3PL company specializes in things like negotiating lower shipping prices, efficient picking and packing, and materials management. As opposed to a company attempting to accomplish it on its own, they are typically considerably more likely to do it better and more affordably.