What is a Third Party Logistics (3PL)?

What is a Third Party Logistics (3PL)?

Businesses face many hurdles and complexities when getting their products from their factories or distribution center to the customer’s door. Such hurdles include implementing the cargo delivery services itself, the overall costs involved with running a fleet of vehicles, and handling freight forwarding, which is why more and more companies are turning to third party logistics (3PL).

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But what is a 3PL? And how it can help you improve your logistic network and operational performance? Read on to know more.

What Is A Third Party Logistics?

3PL stands for third party logistics. These are companies that specialize fundamentally in moving goods from A to B. This means offering freight forwarding and cargo delivery services, point-to-point delivery, providing drivers, and finding the optimum routes and distribution networks.

Most logistics providers can scale down and maximize resources and profitability during procurement. With many services offered to encompass 3PL supply chain activities, third party logistics providers are expected to optimize the company’s logistics framework process.

A comprehensive 3PL will offer the following services:

  • Freight forwarding
  • Cargo delivery
  • Point-to-point delivery
  • Driver provisioning
  • Distribution network optimization
  • Route optimization
  • Warehouse management
  • Inventory management
  • Order fulfillment
  • Supply chain management

3PL vs. 4PL: Differences Explained

4PL stands for fourth-party logistics. A 4PL is a company that provides a comprehensive outsourced logistics solution that combines the core competencies of leading service providers with its management resources and technology to create a seamless, end-to-end solution.

4PLs are often used by companies who have complex supply chain needs or who want to outsource their entire supply chain operation. 4PLs typically provide transportation management, warehousing, order fulfillment, and inventory management.

The main difference between 3PL and 4PL is that 4PLs provide an end-to-end solution while 3PLs provide fragmented solutions. Additionally, 4PLs have their management resources and technology while 3PLs typically do not.

Types of Third Party Logistics Providers

Since logistics is an ever-changing industry, many companies offer various services and logistics solutions. Here are the types of third party logistics providers that can help you improve your distribution network and last mile deliveries.
This type of provider logistic support is fundamental because it involves transportation and storage of products and some other requests from the company’s end.

Service Developer Third Party Logistics

Apart from the essential logistics support services, the service developer 3PLs offers IT support and product tracking for the security of your parcels. This is an excellent way to ensure that the delivery is safe and on time.

Customer Adapter Third Party Logistics

Customer adapter 3PLs are very different because they take over and run the current logistics operation at the partner company’s behest. This is where they start enhancing the distribution flow of the company.

Customer Developer Third Party Logistics

Customer Developer 3PL inherits the current logistic network flow and applies some of its systems to it. As a result, they don’t merely offer to support the logistics department, but they give them valuable insights on improving their process.

Not Sure if You Need a Third Party Logistics? Assess Your Needs

The main benefit of using a third party logistics company is that it can save your business time and money. Managing your logistics can be costly and time-consuming, especially if you’re not experienced.

A 3PL can help you to streamline your processes, make your operations more efficient, and ultimately improve your bottom line.

Not sure if you need a 3PL? Here are some signs that it might be time to outsource your logistics:

  • You’re growing quickly and need help to keep up with the demand.
  • You’re expanding into new markets or opening new locations.
  • You want to focus on your core business and leave logistics to the experts.
  • Your current logistics solution is no longer working for you.
  • You’re not happy with your existing logistics provider.

If any of the above sounds familiar, it might be time to consider using a third party logistics company.

Industries That Use Third Party Logistics The Most

There’s no one-size-fits-all answer to this question, as the use of 3PL services varies widely across industries. The Fortune 500 companies even use such services to maintain high service levels, especially if delivery and fulfillment are an integral part of the company. However, some of the most common users of 3PLs include retail, manufacturing, and e-commerce businesses.

There are many reasons why these industries use third party logistics. The most common reason is to outsource their logistics needs so they can focus on their core business. Other reasons include accessing the expertise and resources of a third party logistics provider, reducing costs, and improving service levels. This also relieves companies from the workforce that they can cut spending on, saving them wealth and sales.

Third party logistics providers offer a comprehensive range of logistics services that you can customize to meet the specific needs of each client. They have the experience and expertise to handle all aspects of the supply chain, from cross-docking, transportation, and warehousing to order fulfillment and customer service. In addition, they often have access to cutting-edge technology and resources that can further improve efficiency and service levels.

Outsourcing logistics to a third party can help companies reduce costs, improve service levels, and focus on their core business. Therefore, it is important to choose a reputable and experienced provider that can meet the specific needs of your business.

What Exactly Do Third-party Logistics Providers Do for Online Businesses?

Third-party logistics providers provide more than simply shipping services. Many suppliers specialize in various regions within a country. In addition, many storage companies have extended their services by adding shipping services to public and contract warehousing and commodities and freight consolidation. Some businesses also offer different types of freight transport to customers.

Third-party logistics is dependent on technology. Modern supply chain management is concerned with optimizing inventory control and the rapid provisioning of products, which began with simply storing items. Organizations that utilize third-party logistics may provide extra services such as demand forecasting, detailed reports, transportation management software, and freight bill auditing.

Will 3PL Work for Any Size of Business?

A benefit of using a third party logistics provider is that it can improve logistics operations for a business of any size. Logistics providers can provide a business with as few or as many services as are needed. For example, a smaller company may only require shipping or warehousing of goods, while a larger company may want the provider to offer them a bundle of services to manage their entire supply chain. Increased efficiency in these areas allows a business to grow while successfully managing its bottom line.

How Can You Benefit From a 3PL Company?

You can use a 3rd party logistics for several different services. For example, perhaps you are only interested in a truck rental in Pampanga but would handle your business yourself with freight forwarding aspects. On the other hand, you would like to keep your fleet and drivers on the books and need an expert company with the right connections to cover the freight forwarding aspect on your behalf. You can hire a third party logistics that fit your criteria to handle all of your requirements entirely. It is up to you.

However, once you realize how much a 3PL can benefit you, you will likely want to de-fleet and outsource your logistics requirements altogether. Here are some notable benefits of having a third party logistics provider:

Save your money by allowing you to de-fleet

The least many options for a company are to overspend. With a third-party logistics partner, you now choose not to acquire fixed assets like vehicles in doing business. Partnering with third-party logistics providers allows you to de-fleet and reduce business operating costs. You eliminate the hassle of your parcel and save money for other possible business opportunities. In Transportify, we offer this flexible option to every business, especially micro, small and medium enterprises (MSMEs). Our fleet variation can support personalized business requirements.

Improve your distribution network

3PLs broaden the network of every business. They are helping the company grow by reaching and improving the logistics distribution network. Most cargo delivery providers have the infrastructure to handle large volumes of deliveries. By availing of these cargo delivery services, you technically expand your business.

Offer more accurate ETAs on deliveries using state-of-the-art GPS tracking software

It is best to track all your packages to ensure that it arrives safely and on time. State-of-the-art GPS tracking software is a big help in making this possible. In addition, our application offers a live tracking feature on the booking to give our consumers accurate tracking of their delivery status.

Allow you to move on from the paper-trail methods of old and embrace the digitalization of your company’s logistics

Third party logistics partners shall offer digitized receipts on your deliveries. You can easily access these relevant documents with just one click. Apart from digitized revenues, we have a COD and POD feature that may help you ease the burden of processing customer documents regarding each delivery and streamlining your paper trail methods.

Have access to larger delivery vehicles such as ten-wheeler wing vans with long-haul capabilities

There should be a wide variety of vehicles that the company could offer. It widens the business capabilities in reaching the customer if there is an extensive fleet available. Transportify has a large fleet available, ranging from sedans to 10W Wing vans.

Step into the international market with a well-connected freight forwarding service

The right third party logistics provider enables you to transact outside of your market. In addition, a well-connected forwarding service opens opportunities for future expansion that will bring your business to the next level.

Enable you to offer faster and smoother delivery

You may not have the capabilities to offer same-day-delivery, but you can with an established 3rd party logistics. The best logistics provider will ensure that your deliveries are always on time to increase customer satisfaction.

Improve the overall level of customer service that you provide

Overall customer service and satisfaction reflect the image of the company. Your 3rd party logistics provider must be reliable for these services. In addition, the cargo delivery provider must handle customer concerns anytime. With our company becoming your cargo delivery provider, we offer dedicated customer services to handle the items’ booking and transit worries.

These are just a handful of how a logistics provider can transform your business. But you don’t have to commit entirely straight away. For example, third party logistics companies are beneficial when dealing with seasonal variations. For example, suppose your business is quite small for now. In that case, however, if you are experiencing hectic periods throughout Christmas, then a third party logistics provider can offer additional assistance in the build-up to and throughout Christmas.

In addition, you don’t necessarily have to de-fleet entirely and embrace logistics before getting to know them first. You can try their service by handing a few critical deliveries to gauge whether they are worth investing in all of your logistics requirements. For more information regarding this area, check out the Transportify Corporate Account for Business. You will learn a great deal about how we can benefit your business.

Transportify, as Your Go-to 3PL Provider

Transporting goods and materials from origin to destination isn’t easy. Picking the right logistics provider should be in the company’s best interest. A reliable logistics provider takes responsibility for planning, implementation, tracking, and movement of goods. Business distribution networks are becoming more complex since we are now in the modern era where new technologies are being placed. Therefore, choosing the right provider for logistics solutions became an absolute priority.

Transportify, as your go-to 3rd party logistics and delivery provider, offers various services of the best quality. We offer two types of primary services: full truckload and less than truckload shipping. We are fit to help SMEs and large companies with their last-mile delivery needs and door to door from the distribution center to the point of sale outlets.

Our driver-partners are well-trained in different situations required by the business. The core aspects of supply chain management have been considered while crafting our booking procedures, picking and handling, delivery, tracking, and route optimization. We made sure that our customers would pay the right price for excellent service. So what are you waiting for? Download our app now, and explore excellent services.

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Frequently Asked Questions:

What are the advantages of having a third party logistics partner?

🌐 It opens various business opportunities, reduces operational costs, and improves overall logistics service. Your company may now expand if the logistics partner has an extensive distribution network. The company may now de-fleet and soon reduce its operational costs. And a third party logistics partner boosts and improves the process in logistics by trying new systems and methodologies. Transportify can be your go-to logistics partner. We have a wide variety of vehicles and stable market value, which can help your business’s overall logistics integration. 

What is the most affordable 3PL provider in the Philippines?

🌐 There are many 3PL providers in the country. The vehicle selection varies on the business requirements. But if your business or company is looking for the most affordable rates for bulk deliveries, you may choose to avail of Transportify as your delivery provider. We have sedans, L300s, closed vans up to wing vans that could fit your palletized goods.

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