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
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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.
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