What is a 3PL?

Get the answers about a 3PL…from a 3PL!

3PL stands for third-party logistics provider. (Sometimes, it is also abbreviated as TPL.) The main goal of a 3PL is to help your business succeed in the most time and cost efficient manner possible. Whether you’re an expert in making drills, sweaters, baby bottles or tap handles – chances are pretty good, you are not also an expert in moving your product from the manufacturing plant to your customers. That is where a 3PL comes in.

A 3PL manages the logistics of your business’ supply chain. While this could mean helping you manage just one piece of your supply chain, typically a 3PL will help you manage the entire process. This includes:

Warehousing

Typically, you product (or product) does not go directly from its point of origin (where it was created) to its final destination without making a stop. When it make this stop, it needs to be stored and this is where warehousing comes into play.

Warehousing can be provided on both a public and contract basis. Public warehousing gives your business the flexibility to increase and decrease the amount of warehouse space you pay for depending on your business needs. On the other hand, contract warehousing provides a build-to-suit solution. Unlike public warehousing which has many pre-specified regulations, contract warehousing can be tailored to your business. In the long term contract warehousing also provides your business a more cost effective rate, but it typically requires a one-year minimum agreement. So, this kind of warehousing set-up is best for businesses with a consistent shipping schedule and size of shipment.

Transportation
When it comes to logistics, efficiency is paramount to your business’ success. Time is money. Managing transportation includes optimizing traffic patters, identifying the most efficient mode (or modes) of transportation and streamlining the load and unload process.

Additionally, your business needs grow and fluctuate. Clients place big orders, sometimes at random. For you to succeed, you need to get them the product they ordered it, on time. Your 3PL should be able to handle these surges.

Additional Services
Managing the transportation and storage of your product is only a piece of the logistics puzzle. To give your business the best value, your third-party logistics provider should also help with getting your product ready for public sale.

What does this really mean? It means streamlining even more of your process. A 3PL that offers additional services can help you with everything from store-ready packaging and personalization to kitting and labeling.

The end goal of utilizing a third-party logistics provider is getting your product from point a to point b as quickly and inexpensively as possible. It is about streamlining the process and utilizing a staff of experts who  are trained in loading, unloading, transporting and storing. Your third-party logistics provider is an expert in logistics so you don’t have to be. Have any questions? Drop us a line, we’d love to hear from you!

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