da July 7, 2022

3PL Service: Save you Some Time and Headaches


Based on this, the most advantageous strategy for regional expansion could be just a partnership with a 3PL operator, which outsources the functions of warehouse logistics and delivery. When compared with an alternative option (development by building a branch network) the savings are impressive because in this case, the company does not have to rent offices and depots or hire employees.

What is 3PL logistics?

The 3PL solution is a concept from the international classification of logistics services, inducing conveyance, storage, order batching, administration of assets, and cartage to consumers. What is a 3PL provider? The 3PL operator is an intermediary between the owner of the goods and its recipient, who outsources the features of the depot and transport logistics.

The partner can place the most popular and sold goods for safekeeping, thereby reducing the time of their delivery to the buyer. This speed cannot be compared with the speed that provides portage from point A to point B. The goods are already at point B, it remains only to ensure their haulage around the city. At the same time, the logistics partner offers small business customers its own developments that allow them to interact with the company online: receive detailed information on the movement of goods, order statuses, balances, order and receive documents, make changes to the order if necessary, change the destination or sender. There’s a fusion of logistics and IT in this segment. Partners strive to establish the best information support for customers, provide them with convenient interaction with the company, build cross-functional connections, and digitize all this.

3PL operator services are essential for retailers

Cooperation with such intermediaries allows to successfully develop business processes directly related to logistics

  • Inventory control.
  • Cargo handling.
  • Transportation of goods.
  • Inventory.
  • Resolving personnel issues, etc.

Business representatives can focus on development, increasing sales, solving marketing problems, and planning by enlisting the help of 3rd party logistics.

Categories of 3PL providers

The above-mentioned logistics companions are divided into 4 categories:

  • The standard provider (main category). Provide key logistics services: shelf storage, 3PL transportation, sorting, etc.
  • Service developer. He provides an expanded list of services.
  • The customer adapter. Only basic functions are performed and new directions are not developed.
  • The customer developer. A full range of customer tasks is carried out.

Types of services provided by 3PL providers

You can hire an operator who will work on one or more directions of the supply chain 3PL.

  • Receipt of goods in the stockage point. It’s the first stage of the 3PL service. Responsible operators accept goods for further storage in their warehouses. A 3PL provider needs to apply in advance in order to transfer goods. This helps to calculate the load on storage capacity.
  • Storage of merchandise in a warehouse. Items should be stored in comfortable conditions for them to ensure their maximum safety. It is necessary to pay attention to whether the 3PL operator is able to provide proper storage conditions, for example, the required temperature regime.
  • Cross-docking. Articles pass through the depot but are not sent for long-term storage. They are immediately distributed to individual orders and sent to customers.
  • Vehiculation. The provider delivers the consignment to the storage house on its own and sends it to the end customers.
  • Goods labeling. The 3PL operator assigns codes to the units for their accounting, storage, and further shipment after acceptance.
  • Articles accounting. The provider controls the movement and safety of goods in its warehouse.
  • 3PL supply chain management. The operator calculates the balance of goods, free storage facilities, the optimal number of storage areas, and their location.
  • Collection of orders. The 3PL logistics operator forms a parcel from the goods stored in its warehouse and sends it to the delivery address.
  • Packaging and repackaging of goods. The responsible company selects the optimal packaging for each product and packs the product (at the stage of order assembly). The total weight of the parcel, the number of deliveries per order, the safety of the goods, and, ultimately, the client’s experience depend on how competently he does this.
  • Return of articles. When the buyer refuses the order, the 3PL operator takes the goods to his warehouse.
  • Information support. The provider is in constant contact with the owner of the merchandise and at any time can answer questions and give a word of advice.

Most tasks outsourced to providers are operational and transactional.

Advantages of a 3PL operator

It’s easy to find out the 3PL benefits. All you have to do is to determine whether there’s enough free warehouse space and whether there is enough manpower and equipment to ensure logistics processes. Almost 70% of shippers choose to outsource based on this analysis.

3PL supply chain provides:

  • Cost reduction. The operator is able to negotiate more favorable conditions for transportation. Its storage costs are often lower, which will provide the customer with additional savings. Consumers prefer flat shipping rates.
  • Performance improvement. Increased speed and accuracy of ordering. This is especially important for retail. Saving time allows you to reduce company costs and attract more customers.
  • Low capital commitment. The cost of renting warehouse space in large cities is significantly higher than the price tag offered by the 3PL business. Do not forget about the costs of paying for electricity, salaries for employees, and the use of IT systems.
  • Possibility to expand the business. You can hire experts in the company’s staff or use outsourcing. You can focus on entering new markets by entrusting tasks to 3PL logistics.
  • Management of seasonal fluctuations. The problem of seasonal fluctuations is perfectly solved, for example, on the eve of the New Year, you can multiply investments in 3PL, and in January return to the previous volume of work.

So, what is a 3PL? It’s a great solution that brings lots of advantages and offers a personalized approach to completing tasks.

Peculiarities of working with a logistics operator

It’s essential to analyze a logistics operator’s reputation, operating principles, and responsibility before the consummation of a deal. All requirements and conditions of cooperation must be reflected in the contract. If you do not include an act of disagreement in the contract, there is a risk of disputes. Accounts for work performed should be broken down by transaction. It is important to agree on the regular stock count (at least once a quarter), and the conduct of partial, and complete inventories of goods and materials. It is better to pay attention to controlling the timeliness of the tasks and the accuracy of the configuration. Don’t forget to monitor and fix the agreement of the parties in the contract. It is not recommended to transfer all turnovers to a new logistics supplier if you are just starting your cooperation. It is better to adapt the warehouse gradually, thereby reducing the risks.

Who is interested in 3PL logistics?

Only very small or very large online stores can do without various elements of logistics outsourcing. The former can store goods in a small warehouse and deliver them on their own or take them to post offices. The second is to maintain a gigantic warehouse and transport infrastructure, benefiting from the mass effect. Everyone else somehow has to use 3PL experience. As noted above, 3PL in the supply chain is one of the options for organizing logistics for an online store. Here, each store decides for itself whether it is ready to give all the logistics at the mercy of the 3PL operator or leave some of the elements behind. Each seller has their own situation. As a rule, the more he ships orders, the more profitable it is to use the third-party logistics services.What is a 3PL company and what does a 3PL do? In general, it’s an excellent alternative to your own logistics service and allows you to significantly optimize the work of an online store. A logistics operator for any supplier is a long-term and reliable partner with whom it is perfectly normal to discuss plans for joint development, process automation, and ways to improve the service. It’s okay to delegate all the supply points at the issue of 3PLs, focusing on selling or manufacturing rather than shipping. After all, as experience shows, the prices of logistics operators do not differ much from each other, the difference is only in the strengths and weaknesses of each but you can always resort to a valid market tool in order to make the right choice and try.