Third-party logistics, or 3PL, is a service provided by a company to another company in which some or all of the logistics system is outsourced. This outsourcing includes everything from warehousing to delivery, allowing the organization to focus on other aspects of the business.
Fremont, CA: Transportation, warehousing, picking and packing, inventory forecasting, order fulfillment, packaging, and freight forwarding are all services provided by third-party logistics companies.
The Advantages of Working with a Third-party Logistics Provider
1. Cost Cutting
Because 3PL providers can work with carriers on behalf of multiple customers, they can frequently negotiate better rates than individual shippers by leveraging their collective volume and order frequency.
2. Give Your Customers a Better Experience.
As discussed in Supply Chain Digital earlier this week, customers now expect next-day or same-day delivery as standard. Using a 3PL provider lets you provide faster delivery to all of your customers because you can take advantage of 3PL's efficient and well-established distribution network.
3. Reduce Risk
Delays and unforeseen circumstances occur in the supply chain world, as demonstrated recently by COVID-19's devastating effect on global supply chains. When these problems arise, it is the 3PL provider's responsibility to find alternatives and solutions.
4. Acquire On-the-spot Expertise and Knowledge in the Field
If you are starting, logistics can be a daunting and perplexing step, so it may be necessary to seek advice from a company specializing in this field. Engaging experts can improve and guide your logistics operation, allowing you to focus on other aspects of your business.
5. Master International Logistics.
Building on the previous point, one thing that 3PLs can provide right away is knowledge and expertise in international logistics. For example, are you planning to enter a new market? Do you have the time to ensure that your products have the proper duties, customs, and documentation? Again, this is something that a third-party logistics provider (third-party logistics provider) can handle for you. As a result, you have the freedom to enter new markets without the major risk of large investments in local warehousing space or personnel.
