6 Common Things You Should Know About 3PL

3PL or Third-party Logistics relates to a subcontract of ecommerce logistics processes that include storage, inventory management, and fulfilment. A provider of Third-party Logistics Services allows an ecommerce owner to do more with its infrastructure and tools for the automation of order fulfilment.

It is not known who termed Third-party Logistics. However, the time was between 70s and 80s when companies started to outsource logistics services. With the advancement of ecommerce in the 1990s and 2000s, the term 3PL Logistics Solutions has seen immense popularity and started growing fast. The integration of supply chain with transportation and warehousing operations has given it a new height.

Here are a few important points that you should know:

Importance of third-party logistics

As an ecommerce owner, you can find the management of product packaging and shipment at your end hard and expensive. And the fast-growing influence of Amazon in the retail world has enforced other ecommerce players to offer fast and cost0-effective shipping to stand in the market. A third-party logistics company focuses on supply chain that helps businesses to optimize their product shipment effectively and efficiently.

Difference between a freight forwarder and 3PL

A freight forwarding company uses several transportation means, like rail, air, road, and water to transit products from one end to another. They execute several valuable tasks in product shipping and manage relationship with their associates. The jobs they execute are the preparation of shipping documents and negotiation in freight changes without moving the freight themselves. They only act as a middleman between companies looking to transit their goods and carriers. On the other hand, a third-party logistics company handles the entire work of supply chain - picking, storage, packaging, and transit - for its clients.

The services offered by a third-party logistics firm

A third-party logistics company offers the entire range of service for supply chain of a business. The offered services include inventory management, storage, shipping, and distributed inventory.

The benefits can you have from using such a company

Using the services of a third-party logistics company offers numerous advantages. With such services, you can save your time & money, leverage industry experience and expand your reach among customers.

The right time to use the services of a third-party logistics

Get in touch with the right provider of 3PL Logistics Solutions if you find that your online retail store has a fast expansion in the last year. Generally, businesses have a partnership with such a company when they are working on the expansion of their business. They do so, as they want to take benefits of their storage facility and supply chain management, along with their industry experience.

The measurement of the performance of a third-party logistics company

You need to look at several KPIs to measure the performance of the provider of third-party logistics services you have partnered. One KPI consists of the rate of returns that occur due to a shipping error or damage. With this, you can know that there is a constant focus on improving the accuracy and quality of product shipments. Another KPI is used to track delivery time. With this, you can know whether there is or not a bottleneck in the current process of fulfilment. It facilitates you to address the situation and maximise the efficiency.

Summary

It focuses on what you must know about a third-party logistics company with its functions, services, and importance, along with brief introduction in the beginning.