If you run an eCommerce or retail business, you’re probably familiar with the acronym 3PL. It’s shorthand for third-party logistics. 3PL companies provide outsourced warehousing, inventory management, and fulfillment services for businesses. Throughout the 1970s, the demand for outsourced logistics services grew rapidly. Now, with eCommerce at its current levels, the demand is higher than ever. Read on to learn more about 3PL services and what to look for in a 3PL partner.
What Is a 3PL?
A 3PL company takes care of the logistics of your business, such as inventory fulfillment, warehousing, and fulfillment. This method of outsourcing logistics has developed since the 70s and 80s, but services are more robust and comprehensive today.
Why Would a Business Want to Work with a 3PL Services Provider?
Warehousing, inventory management, order processing, and fulfillment all require significant capital investment and expertise. Fulfillment can be particularly complex to manage and getting your products into your customers’ hands with excellence is equally as important as product quality. Therefore, contracting your warehousing and logistics out to a third party provides the following benefits.
- Scalability and flexibility
- Experienced logistics and warehouse management
- Increased cost-efficiency
Your warehouse space needs will expand and contract based on variables like company size, product demand, and economic conditions. When starting an eCommerce or retail business, providing your own warehouse space will prove challenging because you’ll quickly outgrow a small space and more space requires substantial capital investment.
How Does a 3PL Fulfill Orders?
3PL partners provide four core services that help manage your business’s logistics. These services include:
A 3PL’s storage capacity depends on its warehouse space. One distinct benefit of a 3PL is that it can scale with you. A 3PL can provide more or less space depending on your unique inventory storage needs rather than having to deal with buying and selling warehouses.
An efficient 3PL uses technology that integrates with a business’s eCommerce platform to handle orders, shipment, and inventory tracking cohesively, to name a few in one place for a more streamlined experience. If an order is sent directly to the 3PL, a warehouse picker collects the designated items and quantities from their storage location.
If your 3PL offers packing services, a team will also securely ready your items for shipping. The 3PL’s goal should be to preserve the integrity of your products while also keeping your shipping container weight and costs down as much as possible for you.
This step offers an opportunity to use branded shipping materials to give your customers an immediate positive impression of your business.
3PLs also handle the buying and printing of shipping labels. Then, using a chosen carrier service, 3PLs offer clients affordable shipping at various speeds to suit the company’s needs. Once the merchandise ships, the integrated technology used by 3PLs sends the tracking information to the business.
The Qualities of a Reputable Third-Party Logistics Services Provider
There are numerous important qualities to look for in a third-party logistics services provider. The following are a few of the major ones.
- Experience: How long a 3PL partner has been around will give you an idea of their dependability and expertise in the logistics industry. CWI Logistics, for example, has been serving businesses for nearly 60 years. During this time, we’ve endured global hardships, recessions, technological leaps, and more—perfecting our craft to best serve our clients.
- Transparency: When it comes to third-party logistics services, transparency is crucial. Manufacturers and retailers need to see their inventory and shipments in real time. At CWI, we provide a real-time portal to our clients and give them their own private sign-in to access 24/7. In their portal, they can see where their products are in the supply chain at any time.
- Capability: Not all 3PL partners are created equal. You’ll want to into account factors like the number of warehouses and facilities, facility types (ambient/dry, cold storage, freezer storage), geographical distribution, inventory management, transportation network and rates, and types of services (pick-and-pack, cross-docking, e-commerce order fulfillment, contract packaging, etc.). Figure out which services are essential for you.
Work with CWI for Your Third-Party Logistics Services Needs
CWI has facilities spread all across Central Florida and works with a multitude of carriers and partners across the US. Since 1966, we’ve been serving a wide range of industries including apparel, promotion, retailers, medical, and more. Reach out to us today for all of your 3PL service needs!