Everything You Need To Know About Third Party Logistics (3PL) Provider

What is ‘3PL’?

3PL, short for ‘third-party logistics’, also sometimes known as ‘TPL’, is a term which is commonly used in the logistics and supply-chain management sector. It refers to service providers that handle full or partial distribution and fulfilment services of an organisation.

The concept of 3PL goes back a few decades. The scenario was quite different prior to the 1980s when supply and logistics involved only two parties—the shipper (big retailers, manufacturers, or wholesalers) and the shipping carrier. In subsequent years, globalisation gathered pace and more and more sellers started entering the marketplace. Many of them lacked the resources and expertise to manage their own logistics and distribution needs. To take care of their warehousing, distribution and logistics requirements, intermediaries known as third-party logistics providers came into existence.

A 2008 legislation passed defines a 3PL service provider as:

A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.

It means that a 3PL service provider does not hold legal ownership of the inventory, but is bound by law to adhere to the duties assigned to them with respect to it.

The market for 3PL service providers has greatly expanded in recent times with the growth of the internet, which has helped both online and offline businesses to flourish. The importance of 3PL service providers in today’s globalised world can be gauged from the fact that over 86% of the Fortune 500 companies and 96% of the Fortune 100 companies utilise their services.

Top-of-the-line 3PL service providers are critical for your business in today’s highly competitive commercial landscape. They offer quick, reliable, time-bound, scalable solutions to ensure your customers receive the best delivery experience. There are some providers that offer retail distribution and returns facilities as well. 3PL service providers enable your revenue and business to grow by providing safe and timely delivery of goods to your customers.

Why hiring a 3PL service provider makes sense

It is sometimes seen that businesses turn to 3PL service providers only after their lack of experience in fulfilling orders starts seriously affecting their business. This puts them at serious risk of losing their customers as unhappy customers may shift their loyalty to a competitor.

Many businesses fail to properly account for storage space as a part of their fulfilment expense. Moreover, managing your own warehouse is expensive and requires both money and specialised skills and workforce. If you are finding it tedious to run your own facility, try getting quotes from various 3PL service providers and compare them. Quality providers of 3PL warehousing in Australia supply the staff, space and transport facilities needed to take care of your storage and distribution requirements. Leading providers of order fulfilment services in Australia also offer highly customised solutions for specific business needs. They enhance your brand reputation by ensuring that your customers enjoy a positive experience when it comes to delivery of their goods.

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