What is a Third-Party Logistics provider?

If you’ve ever wondered exactly what third-party logistics (3PL) providers do, we’ve got the answers you need. From transportation to warehousing and supply chain management to logistics operations, 3PL providers offer a wide range of services to commercial and industrial customers.

A 3PL provider is a specialist company that provides a range of distribution, storage, transport and fulfillment services to customers. These customers outsource these types of operations to the 3PL business and rely on the 3PL provider to offer end-to-end management of specific services. 3PL providers are a vital part of supply chain management and they are used by the vast majority of large businesses around the world.

How does a third-party logistics provider tell the customer what services it will provide?

All the services offered by a 3PL provider will be carefully documented and explained in contracts, agreements and service level agreements (SLAs). These documents will detail the scope, duration, cost and other vital aspects of any services that the 3PL provider offers.

What are the main services offered by a third-party logistics provider?

Types of logistics services can vary widely, and many 3PL businesses specialize in different parts of the supply chain. In general, most logistics services fall into the following areas:

• Procurement: Ordering and receiving goods from elsewhere in the supply chain
• Order fulfillment: Receiving orders from customers, picking and packing and arranging for the orders to be completed and sent out
• Storage: Providing temporary storage for goods in warehouses and similar locations
• Transportation: Arranging for the consolidation, deconsolidation, management and transportation of goods

3PL providers also offer a range of supplementary services including IT systems integration, inventory management, data exchange, reporting, reverse logistics and other offerings.