As the process of globalization grows, companies increasingly sell products and services to international markets, which requires a lot of production and distribution activities. Some factors have brought additional pressure to companies, requiring them to provide customers with a variety of products through effective supply chain systems.
What is 3PL in the supply chain? Next, we will discuss the supply chain to understand how 3PL operates and what it can bring to you.
What is 3PL in Supply Chain?
3PL stands for third party logistics provider. It is a company that provides services to help companies manage their supply chain activities. A 3PL provider can also be called an outsourcing agent or a service provider. The main purpose of this type of company is to reduce the workload of the client company by providing them with all the necessary logistical operations.
They will take care of the entire supply chain management process, allowing you to focus on your core business. 3PL providers can also offer additional services such as transportation management, warehousing and distribution services, as well as packaging and labeling. They are usually more cost-effective than having all these operations done in-house, especially when it comes to large corporations who have many locations and products.
Benefits of 3PL Services
1. Reduce costs:
3PL services can significantly reduce the costs of your business, especially if you have multiple locations or products to manage. They are often more cost-efficient than having all these operations done in-house, especially when it comes to large corporations who have many locations and products.
2. Improve efficiency:
Having a 3PL provider manage your supply chain means that you don’t have to worry about the logistics of getting goods from point A to point B—they do it for you! This will allow you to focus more on other aspects of running your business such as customer service and product development.
3. Reduce waste:
A 3PL provider will be able to help you streamline your operations and reduce the amount of waste that is produced, which can save you money in the long run.
4. Faster delivery time:
A 3PL provider has a network of warehouses and trucks at their disposal, which means they can transport goods faster than if they were done in-house—meaning that products get delivered sooner!
5. Improve customer service:
When you let 3PL suppliers manage your supply chain, the advantage is that they can provide better customer service than you. They can provide faster turnaround time and typically have multiple locations across the country, so no matter where your customers are located, they can quickly obtain products.
6. Reduce risk:
By using a 3PL provider, you can reduce the risk of your entire supply chain. If something goes wrong with one of your suppliers or vendors, it won’t affect the rest of your business.
How Does 3PL Work?
3PL providers are essentially middlemen between you and your suppliers. They provide a number of services to help you manage your supply chain, including:
Inventory management
A 3PL provider will take on responsibility for managing inventory levels at their own facilities, warehouses or distribution centers. You can use this service if you need to purchase more space than what’s available in your own facility.
Logistics management
A 3PL provider can help you manage the entire supply chain process, including sourcing and distributing orders. This includes tracking inventory levels and shipping information, as well as managing relationships with suppliers and customers.
Transportation services
3PL providers will handle the transportation of goods from one location to another. This might include using their own trucks or renting space on commercial vehicles like trains or airplanes.
Order fulfillment
A 3PL provider can take care of the last step of the supply chain process, which is getting products to customers who have ordered them. This can include packaging and labeling as well as making sure they’re shipped on time and arrive safely at a customer’s location.
What are the basic types of 3PL companies?
There are three basic types of 3PL companies:
Distribution based: These 3PL companies store your products until you send them orders. Once your3PL supplier receives these orders, it will select items from the inventory, package the items and ship them to the recipient.
Based on finance: These 3PL companies are specialized in the financial aspects of e-commerce logistics, such as freight payment, audit, inventory accounting and financial management.
Based on freight forwarders: These 3PL suppliers mainly focus on guiding your inventory from the warehouse to the postman who handles distribution.
Information based: These 3PL companies are online based and mainly focus on B2B operations. They use electronic markets to provide power for logistics and transportation services.
Based on transportation: These 3PL teams focus on transportation from factories to warehouses to customers
What services does the 3PL supplier provide?
The 3PL provider can provide various services, depending on the needs of your business:
Freight management and delivery tracking
The 3PL company will arrange for your goods to be transported from one location to another. They can also track your shipments in real time using an online system. You’ll receive notifications when a shipment is dispatched and when it arrives at its destination.
Warehousing and distribution
A 3PL company can store your goods in their own warehouses, or they can provide you with a facility for storing your products. They also manage the transportation of inventory within that facility.
Customs brokerage and clearance services
Customs brokers are needed if you’re shipping goods to another country. The 3PL provider may be able to offer this service as well.
Takwawy:The role of third-party logistics in supply chain management is not a new concept to many companies that have been around for long enough. The use of the 3PL service has increased, especially with the advent of globalisation and companies needing to simplify their supply chains. A 3PL or Third Party Logistics Company offer companies different services such as warehousing, transportation and delivery and a spectrum of activities all under one roof, thus simplifying the cost assessment and making decisions easier.
Maxtop Tech is a China sourcing company and supply chain assistance management company. Our service for buying office is help our customers to import goods from China more smoothly, more simple. more time-saving.