3PLs, or Third-Party Logistics, Explained

3PL Service - Warehousing and Shipping

What is third-party logistics?  

The origin of the name ‘Third-Party Logistics’ is unspecified; however, companies have been outsourcing to them since the 1970s. By the 90’s and 2000’s, 3PLs began expanding their services due to the introduction and growth of eCommerce.  Today, many companies use 3PLs. However, for a company to outsource, they must first be large enough to warrant a 3PL. If your company plans on outsourcing, it is essential that you have an adept understanding of what it is prior to investing. 

Third-party logistics, also known as 3PLs, are purchased professional services that help businesses execute logistic services. 3PLs involve the outsourcing of eCommerce logistics processes such as, warehousing, inventory management, transportation, global shipping, information technology and fulfillmentOn the most basic level, their services support all aspects of shipping operations and are typically integrated into a company’s warehousing and transportation procedures in order to help a business succeed.  

3PLS are an underlying service provider that usually focus on discrete functions of business supply chain operations. The amount of help and services you choose to accept may depend on the needs of your growing company, but ultimately their involvement is decided by you. They can provide one service or multiple services that cover your supply chain.  

The goal of a 3PL is to generate supply chain efficiency. Leading 3PLs will go above and beyond to enhance a company’s operational, financial and end customer performance. By providing services such as industry forecasting, outsourcing can save a company a great deal of time and money. They are essential in executing productive operations for a company without causing them to lose money.  

As previously mentioned, the major functions of a 3PL include: Information Technology, Global Shipping, and Transportation.  

Information technology is used to manage warehouse operations, eCommerce, customer relationships, and transportation. Application programming and cloud-based systems are essential tools utilized by 3PLs to retrieve, analyze and distribute vital data. These tools provide increased visibility to the process of a supply chain and ensure the fine conditions of shipments in transit. 

Global shipping is service 3PLS oversee to ensure that all requirements of trade compliance are met, budgets are controlled, and plans are properly executed.  

When it comes to transportation, 3PLs manage carriers, insurance, private fleets and can even lower transportation costs for a company. Because transportation is an essential part of the supply chain operations, 3PLs aim to develop solutions for complex challenges and drive efficiency to ensure a successful execution of business plans. 

Autoline Industries has two impressive warehouse facilities in both the United States and Hong Kong. Our team supplies, markets and distributes the highest quality products across a variety of industries around the world. Autoline Industries is equipped to warehouse and ship products on behalf of companies while keeping them up to date every step of the way. Our services include warehousing products, fulfilling orders, forwarding, freight, Southbound forwarding, and Northbound forwarding. If you have any questions regarding third party logistics, or to discover if these services are right for you, feel free to contact us online or by phone at 480-829-8100