WHAT IS THIRD-PARTY LOGISTICS (3PL)?

Third-party logistics (3PL) is the outsourcing of logistics services – such as warehousing, order fulfillment, and transportation – to an external provider. 3PLs help businesses scale operations, reduce costs, and simplify supply chain management.

Also known as:

  • Third-party logistics provider
  • 3PL provider
  • 3rd party logistics

RELATED: 3PL vs in-house fulfilment: Which solution is right for your material handling?

HOW DOES THIRD-PARTY LOGISTICS WORK?

A 3PL provider acts as a logistics partner, handling operational tasks that would otherwise be managed in-house. Services typically include:

  • Warehousing and inventory storage
  • Order picking and packing
  • Shipping and last-mile delivery coordination
  • Returns management (reverse logistics)
  • Freight forwarding or customs clearance (in some cases)

3PLs often leverage logistics technology platforms to manage inventory, provide real-time tracking, and ensure efficiency. Some providers specialise in specific sectors (e.g., fashion, e-commerce), while others offer broad, scalable solutions across industries.

BENEFITS OF USING A 3PL PROVIDER

  • Scalability: Rapidly scale operations up or down based on demand, without major capital investment.
  • Cost efficiency: Share warehouse space and staff with other clients, reducing overhead.
  • Logistics expertise: Leverage deep knowledge in supply chain strategy, customs, and compliance.
  • Technology access: Many 3PLs offer modern tracking systems, WMS (Warehouse Management Systems), and data analytics dashboards.
  • Market expansion: Use global networks to access new regions without building infrastructure.

RELATED: 3PL collaborations: A new partnership system in fulfilment

3PL VS 4PL – WHAT'S THE DIFFERENCE?

Feature 3PL 4PL
Role Executes logistics operations Manages the full supply chain strategy
Ownership Often owns/leases physical assets Typically asset-light, strategic only
Focus Warehousing, fulfillment, transport Coordination of 3PLs and supply chain partners
Complexity Tactical/operational Strategic/consultative

HOW BEUMER GROUP SUPPORTS 3PL OPERATIONS

BEUMER Group technologies are frequently deployed in large-scale 3PL distribution centers where speed, scalability uptime, and flexibility are essential. Our systems are designed for dynamic environments where clients, SKUs, and order volumes change frequently.

As both a supplier and an integrator, our 3PL-focused solutions designs cover a wide range of technologies, including:

These capabilities help 3PLs meet tight SLAs, reduce operational costs, and onboard new clients with minimal disruption.

RELATED: 3PL challenges: Leveraging technology for success

FAQ ABOUT THIRD-PARTY LOGISTICS

  • Major 3PL providers include UPS, FedEx, and DHL, which all manage warehousing, fulfillment, and transport services for businesses worldwide.

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