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What Are 3rd Party Logistics
When you run a business that deals with physical goods, there are always areas for improvement, and it is important to know which aspects of the business to outsource.
Did you know that even the largest corporations in the world outsource most of the logistics of their business to 3rd parties? For example, the biggest customers for closeout companies are actually big name department stores. The same is true when it comes to companies that provide logistics services.
Now, do not misunderstand this to mean that you only need such services if you are a multi billion dollar corporation. Companies of all shapes and sizes work with 3rd party logistics warehouses.
Whatever the size of your business, it may be wise to work with a 3PL provider. This is simply a firm which provides you a service of outsourced logistics services or even takes care of the entire supply chain for you.
The more formal definition can be found with the Council of Supply Chain Management Professionals which states that 3PL is defined as "a firm [that] provides multiple logistics services for use by customers. Preferably, these services are integrated, or bundled together, by the provider. Among the services 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding."
The common misconception that some people have is to assume that this is only done by the likes of Fed-Ex, but 3rd party logistics goes much further than just transporting and packing things up.
In fact, some companies go a lot further and can even act almost as a management team of your own company. They can come in and literally take over your entire supply-chain management, to where you don’t have to worry about it – you just do the selling and marketing.
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