It is common knowledge that 3PL provides its users with a wide variety of services to help them better manage and deliver logistics operations. This article will explain some of the most common 3PL core function in detail, how they might help you and your business, and how you can choose a 3PL that is right for you.
What is a 3PL?
First, let’s refresh your memories with the definition of a 3PL. 3PL is an acronym for third party logistics. They work with other a network of other companies to outsource logistics services. Having a 3PL take care of your logistics gives you the time and space to concentrate on other value-driven, important business objectives. Third party logistics take care of a number of elements involving warehousing, distribution, and fulfillment.
3PLs are commonly found in industries such as:
- B2B (business-to-business),
- Raw materials,
- Bulk goods
- Wine and spirits
- General merchandise
- And the list goes on.
Should you and your team have any specialized functions or specific business needs, you can always reach out to 3PL companies and let them handle the logistics operations for you.
In the age of booming e-commerce, logistics have become the beating heart of a supply chain. Therefore, the need for customized fulfillment processes has gone up dramatically. Owing to such fact, 3PLs will continue to play a major role in modern logistics
3PL core services
Does your company deal with dozens of orders each day? Is your company growing rapidly? Do you find it hard to keep track of your inventory from time to time? Do you wish you knew how to manage your warehouse space better?
If the answer is yes, it might be a good idea to start looking for assistance from a 3PL provider.
Or it is an entirely different story in your case. Your company is fairly new, orders are only starting to come in. You are confident that your in-house team will be able to handle everything, though they might be inexperienced.
As a matter of fact, it does not matter how young or old your company is. It is about efficiently managing and upgrading the business’ logistics operations. 3PL might seem like a huge investment at the beginning, but it surely pays off in the long run both time and cost-wise. If you are wondering what some of the 3PL functions are, below are some for your reference. From there, you can decide which one works best for you.
3PL function #1: Warehouse
What do 3PL warehouses do?
While managing your warehouse, have you ever encountered situations when:
- Warehouse fees are expensive, but you feel as if you have yet to fully utilize the warehouse space.
- You and your team are still struggling to trace and track the movements of the items within the warehouse.
- Orders are taken when the items are understocked and vice versa.
- You and your team struggle to keep up with the sudden surge or drop in orders.
If you find yourself and your team caught up in such situations, maybe your team is inexperienced or has not had the ability to handle such operations professionally. Spending too many resources on an in-house operation team may become expensive in the long run.
This is when a 3PL taps in to save the day.
3PL warehouse is a common core function. They will help you with:
- Providing space for your inventory. This can either be full-time or temporary. Your 3PL provider will take care of organizing and managing them. The items are in good hands as 3PLs are experts in their field.
- Packaging. Other than standard packaging, 3PLs can help you with customized packaging.
- Assist you with transportation – whether it is same-day shipping or two-day shipping.
- Other than storing, 3PL warehouses help you with the goods distribution.
- The transportation of the packages. Further details about transportation alone can be found later in the article.
Do keep in mind that no 3PL warehouse is the same. However, you do need to choose a provider that can accommodate your needs comfortably – even scale up along with your company’s growth.
What does a good 3PL warehouse look like?
As warehouses play a crucial role in your supply chain, choosing the right one for your company matters. Below are the basic criteria you should look at when choosing your 3PL warehouse.
Warehouse schedule. Understanding the operating hours of your 3PL warehouse allows you to prepare and plan the fulfillment and distribution of the goods. When does the warehouse start working and when do they stop? Make sure you are clear about such terms in order to not deliver the order late, or your reputation might be harmed.
Network. What are the warehouse locations? Are those locations optimal and close to your customer base? Choose a 3PL warehouse that has a suitable warehouse network to accommodate the needs of your customers quickly.
Costs. Does your 3PL warehouse have a clear pricing structure? Are they up-forward and honest about the cost of their services – credible warehouses should factor in the cost of returns and destruction.
Insurance. What should the warehouse insurance cover? Figure out your company’s needs and determine what terms should be covered, be it the goods during delivery, storage, or returns.
3PL function #2: Intermodal Shipping 3PL Providers
Moving bulky items in the same steel containers via two or more different modes of transportation is referred to as intermodal transportation.
Whether you need to deliver items within your nation or across states, shipping is a crucial component of every organization. Not only is it one of the most important interactions with your customers, but it also is the only method to guarantee that your clients can purchase the numerous goods your business offers, regardless of how far they are from you.
Therefore, 3PL firms seek to save you money and time by providing superior shipping services at competitive prices, whether you choose to transport by rail, truck, or ship. The containers have received international certification and can cross borders without needing to be changed.
3PL function #3: Expedited Freight
An expedited delivery method ensures that items arrive more quickly than with conventional travel.
So, if you think you are lacking behind on a shipment, or if customers from certain areas have to wait longer to receive goods and are not happy about it – reach out and let expedited freight services help you.
Let your 3PL provider take care of all the burden of a fast shipment for you and meet every customer’s needs before they start looking to purchase from your competitor. Pay a slightly higher fee and have all your worries taken away.
3PL function #4: Transportation Logistics Services
Most 3PLs have their strategy of managing complex, multi-layer tasks involving the shippers, location, fees, and cutoff times. It can become overwhelming if an inexperienced team is required to be in charge of such a complicated network. As 3PLs are experts in what they do, not only will they manage all the paperwork for you, and meet your schedule but they will also look for ways to save you as much cost as possible. This is possible by leveraging the buying power.
The 3PL transportation services you can find are as follow:
- Domestic or local freight: Once again, your provider will make sure they save you the most costs. It is done both by choosing the fastest and most cost-effective transportation, no matter the mode of transportation.
- Export or import: whether you need your goods delivered inside or outside of the country, the 3PL provider will take care of the paperwork, carrier, and other tasks along the way, You can sit back and know your packages are in good hands.
3Pl function #5: Distribution Logistics Services
Whether it is distributing items business-to-business (B2B0 or business-to-client (B2C), 3PL providers have you covered. After they receive your goods, store them, record them in the system, and take care of them, 3PLs will also overlook the process of distribution.
Oftentimes, the process of recording the number of goods is done by modern technology that is seamlessly integrated into your internal system. Their technology often provides you with enhanced insight regarding shipments, inventory tracking, and the level of stocks.
Here, some of the primary duties include:
- Packing and product kitting
- Processing and packaging of orders
- Inventories and storage
- Sending packages to customers
- Management of returns made by customers
- Delivering freight to other retail establishments
Lastly, due to the 3PL’s vast experience, they will make sure your goods are preserved well even during the shipment, the route is optimized and no shipment needs to be spit.
Are 3PLs the right choice for your business?
By the end of this article, if you found 3PLs to be just what your business needs, do not wait around any longer and let SCS Solutions help you. However, if you are still hesitant and need more information regarding how to choose the most suitable 3PL for your business, go through our guide about how to choose a 3PL provider.
For further advice regarding 3PLs, EDI or WMS, feel free to reach out to SCS Solutions team via Linkedin or Facebook.