A 3PL or Third-Party Logistics is outsourcing all or much of a company’s logistics operations to a specialized company. The term 3PL was first introduced in the early 1970s to identify intermodal marketing companies or IMC’s in transportation contracts. A 3PL allows you to focus on other parts of your business as it allows you to outsource operational logistics from warehousing. This includes transportation, warehousing, picking and packing, inventory forecasting, order fulfillment, packaging, and freight forwarding.
Why Choose 3PL?
When the company grows, the need for warehouse space increases beyond that business’s ability to manage it. 3PL warehousing is always a good option for companies facing storage capacity issues. 3PL also provides more value including challenges with customer service, order fulfillment, returns, order tracking, technical services, inventory management and much more.
Types of 3PL
Depending on the services required there are particularly three types of 3PLs:
This type of 3PL store, ship and handle returns.
This type of 3PL are specialized in the transportation between locations, transportation 3PLs include DHL, FedEx, UPS including the USPS.
This type of 3PL includes shipping and receiving the goods from one point to another.
Benefits of 3PL
3PL provides a great deal of value to the companies dealing with challenges such as rapid growth and changing market conditions. 3PL has several benefits:
1. 3PLs providers have a vast network of resources across countries, which includes warehousing space, trucking, and transportation fleets. This provides cost-saving options, as the company themselves will have to give in extra effort and double or triple the money.
2. As the 3PLs have a vast network across countries, the company can also expand its market outside its country and manage internationalization.
3. Leasing warehouse space and hiring a team of workers increases the overhead, instead of working with a 3PL can minimize the costs so capital can be directed toward return generating endeavors.
4. Customers can expect to achieve faster and more reliable delivery times, tracking systems have improved and customers can thus have order status, there are reduced chances of damage or incorrect product delivery. 3PL got it covered for you, all you have to do is select one Third-party logistics for your company and they will take care of the rest.
How to choose your 3PL provider?
The right 3PL provider can make or break your company’s logistics, customer service, company’s reputation and repeat purchase rate. If you are about to select a 3PL provider for your company trust someone with sales, inventory and other information at significant risk. Choosing the right provider is a balance between quantitative and relationship building.
1. Make sure that the 3PL can handle your current volume but also the forecast stock of volume, you want to choose a 3PL that can handle your business now and when you are at your full speed.
2. Check the provider’s terms and conditions and get a report on the company’s performance over the last few years. Seek references and information about on-time deliveries and delays. Your main focus should be on how the provider deals when there are problems.
3. Make sure your 3PL provider is using the latest technology.
Tenaxx Logistics is top Logistics Company in Cambridge, Ontario
We offer full-service 3PL – we’ll manage everything so you can focus on growing your business. Find out why so many people trust us with their third party logistics needs. Call our Tenaxx Logistics expert team today on +1(437)2200463 to know more about our services.