What Are 3PL Services? How Do They Work?

The companies which handle the outsourced procurement, distribution as well as transportation functions of other companies are known as Third Party Logistics (3PL).  Different 3 PL companies offer a different type of 3PL services like few offer the freight shipping or product sourcing while few offer multiple services like warehousing and distribution to the end users.

3PL Services

The role of 3PL services is imperative in the smooth operations of start-ups and small businesses. The real challenge for the small businesses lies in identifying the functions which can be handled in-house and which need to be outsourced via 3PL experts. The operating strengths should be handled in-house and the rest of the functions should be outsourced. It helps in boosting operational efficiency and contributes the cost cutting as well.

Role Of 3PL Services:

Undersupply to sale cycle, there are 3 different roles, identified primarily as Procurement, Transportation, Distribution and Growth. For the businesses with tangible stocks, they undergo each facet of this process. Managing everything in-house is not always a profitable proposition. However, it is the company’s discretion to pick up the functions which need to be outsourced to focus on its core competencies.

Let Us Discuss an Array Of 3PL Services in Brief:

1. How Procurement Has Streamlined the Processes Like Sourcing and Manufacturing By 3PL?

The process of receiving the products that a company sells is called procurement. A contracted or in-house manufacturing unit may be deployed to produce such goods. Alternatively, ready-made goods can be procured from the domestic or overseas manufacturer. Any step undertaken to procure these products is covered under the process of procurement. Following are the broad categories which are covered under this process by any 3 PL service provider:
  • Product development: A 3PL can help a business to engineer or design a certain product and in securing a patent.
  • Outsourcing of Raw Materials: A cost-effective sourcing plan can be worked out with 3 PL along with identifying the best materials.
  • Scouting of Production facilities: To match the right factory with the array of production facilities, a 3 PL can work best for you.
  • Scheduling of manufacturing: After forecasting demand of the product, a 3PL can churn out cost-effective schedules and manufacturing plans.
Sourcing of Finished Goods: To meet the needs of the company, a 3 PL can customize the goods with utmost precision.

3PL Services


2.    How 3PL services efficiently deals with inbound shipping?

To find cost-effective carriers along with an abundance of paperwork to handle, a 3 PL can simplify your work. It also helps in strictly meeting the schedules and ensures the timely delivery of the products which are procured. The various transportation needs are covered by the 3 PL under the three broad categories below:

Domestic Freight: To manage various pick-up and delivery schedules including all the paperwork, a freight broker should be considered. They can offer the best deals.

Export/Import needs: Tasks related to all the duties, paperwork and transportation costs are effectively handled by the 3 PL during any export or import of goods.

Overseas Shipping: To procure the best airfares as well as fastest Transocean or air mode of transport, 3 PL can be of major help.

The role of 3PL services in expanding the sales of an organization is indispensable. Right from developing the branding of a product to managing it on various platforms, 3 PL has possessed an expertise. It can manage the various e-commerce platforms to expand the reach of your product.

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