Ask any small company if it’s spending too much time fulfilling orders, and the answer is probably “yes.” If your answer is “yes” as well, it’s time to consider whether you should outsource logistics to a third-party logistics firm. An excellent 3PL firm isn’t just another vendor; it’s a partner — a partner who happens to handle a critical aspect of your business.
It’s all about playing to your strengths: Your company is excellent at what it does. That’s the area you’ve put much effort into, but warehousing, inventory management, and shipping may not be your strong suit or the best use of your team’s time and skills. Third-party logistics providers can step in.
What Exactly Is 3PL?
Third-party logistics firms provide logistics, supply chain services, and management for almost any brand with something to sell. However, not a new concept, the growth of e-commerce created more need for 3PL firms that can help with services like freight forwarding, warehousing operations, small business inventory management, technology integration, and the transportation of goods.
In the simplest sense, 3PL companies are in business full-time to maintain every aspect of the supply chain, from warehousing and inventory to the final mile, handling returns and offering many other value-added services. While it can initially seem that 3PL providers are just another expense, an experienced 3PL provider can help your company manage your logistics operations far more efficiently and less expensively than handling those tasks in-house.
What Can 3PL Do for You?
By partnering with a 3PL firm, all of your e-commerce shipping logistics and distribution duties are handled professionally by a company in business full-time to carry that load. It frees up an entire division, helping manage, control, and slash operating costs. Using a 3PL can also reduce the potential for shipping errors because we have the technology and systems to minimize mispicks and other common issues.
Types of Companies that Benefit from 3PL
Virtually every company whose products require warehousing and shipment can benefit from 3PL, regardless of the size. These companies are generally found in high-growth sectors, ranging from consumer retail, food, and dairy, construction, and home improvement, hi-tech, and pharma, and healthcare. Trends in these areas are pointing upward, and things don’t look to be changing anytime soon. For example, e-commerce sales made up 18{4c4f03b91cd9576fd99f221c8ec5638e80a399c7c28249074e73a48353523d39} of all retail sales in 2020. It’s projected to reach 20{4c4f03b91cd9576fd99f221c8ec5638e80a399c7c28249074e73a48353523d39} in 2021 and 22{4c4f03b91cd9576fd99f221c8ec5638e80a399c7c28249074e73a48353523d39} by 2023.
The Final Word
There is no doubt that a 3PL partnership is a highly beneficial small business solution for any company that ships and stores products. It gives you the freedom to concentrate on your core competencies and leave the heavy lifting to the professionals in the field. In addition, a 3PL firm can quickly scale things up (or down) during seasonal peaks and valleys in your normal yearly sales cycle. It frees you from the exposure of investing a lot into transportation, technology, and human resources — all necessary components of warehousing, performing inventory duties, and the shipping of goods.
Chris Capelle is a technology expert, writer, and instructor. He has worked in the publishing, advertising, and consumer products industries for more than 25 years.
References:
https://www.thebalancesmb.com/selecting-a-third-party-logistics-3pl-provider-2221230
https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=3468&context=dissertations