What does 3PL mean?

In this article, we will dive into the world of 3PL (Third-Party Logistics), highlighting how it can streamline operations and save businesses both time and money. we’ll walk you through the benefits of partnering with a 3PL, how it can transform your order fulfillment process, and the unique advantages offered by Logiwa’s WMS software.

Key Takeaways:

• 3PLs enhance operational efficiency by managing inventory, packaging, and shipping, freeing businesses from these tasks.
• Partnering with a 3PL eliminates the need for physical storage space and in-house fulfillment logistics.
• Logiwa’s WMS software offers end-to-end visibility, scalability, and efficiency in the 3PL process.
• 3PLs allow businesses to focus on sales and growth rather than order fulfillment.
• Understanding 3PL is essential for businesses looking to optimize their logistics and scale up effectively.

You may have heard of 3PL before but never known what it is. For those wondering about the meaning of 3PL, the short definition is third-party logistics. But that is just what the acronym stands for. What does 3PL mean, exactly?

In this article, we will dive further into what 3PL means and how incorporating 3PL into your company operations can bring exponential benefits.

Click here to learn how Logiwa WMS is built specifically for 3PL warehouses

Defining 3PL

According to a report from Global Market Insights, Third-Party Logistics (3PL) market size exceeded USD 1 trillion in the year 2019 alone, and it has been gaining momentum ever since, with no signs of slowing down.

This popular acronym is filling conversations and getting people excited about its potential. But have you ever overheard it and found yourself wondering, what is the real meaning of 3PL?

As mentioned above, 3PL is an acronym that stands for third-party logistics. When you talk about a 3PL provider, this means a company hired to provide outsourced logistics services. These services can include a wide variety of things—pretty much anything related to management, procurement, or fulfillment operations.

For instance, some main areas that 3PL can impact, include:

• Warehousing
• Inventory management
• Shipping, picking and packing
• FLT and LTL
• Reverse logistics
• Kitting and customization

There are some 3PL providers that will handle critical tasks like the storing and shipping of hazardous materials, managing cold fulfillment, and taking on the warehousing responsibilities associated with more challenging-to-store high-value goods. These goods include bulky, heavy products that are challenging to store within a warehouse but are worth a lot of money.

That’s the 3PL definition, and now we move on to more excitement – discovering how 3PL can bring big improvements to your operations.

Basic 3PL Services

If you are actively looking for a 3PL company or want to learn more about 3PL logistics, learning the basics of 3PL logistics services will help you better understand what’s involved with end-to-end 3PL.

The main fundamentals of 3PL consist of the powerful trio below:

• Inventory Management
• Warehousing
• Fulfillment

3PL Process

Now that you know the basics of 3PL logistics services, we’ll explain the actual 3PL logistics process. Once you have read this article, you will know what happens at a 3PL warehouse when you (the customer) click to submit a purchase order from the comfort of your office or home computer. Here’s a look at the process, from that very first click and charge to the credit card to the product you have purchased arriving right at your door:

1. Receiving
   This refers to when a 3PL warehouse accepts incoming inventory, which they will then place directly in their storage.
2. 3PL Warehousing
   Once inventory is received at a 3PL warehouse—also known as a fulfillment center—it will be systematically given a specific and dedicated storage location (for instance, a particular shelf, bin, pallet, etc.). This will help the 3PL easily locate it when it comes time to fulfill the order.
3. Picking, Packing, Shipping, and Fulfillment
   Once an order is sent to your 3PL, the picking team springs into action. It is the task of these individuals (the pickers) to pick—or procure—the products (using a picking list that contains the desired items, amount, and storage facilities to collect purchased products from).Once the items have been picked, the packers’ job is to ensure that they are safely and securely packaged, so they make it to the desired destination intact. It must also arrive in the manner laid out by the company who hired them (preferences of packing modes will vary by brand). Then comes shipping, with most 3PLs handling everything for you, right down to purchasing and printing shipping labels.
4. Returns
   It happens; customers buy a product and decide they no longer want it. It’s not ideal, but the good news is that many 3PLs also provide return processing services. This means that you won’t have to handle returns in-house, which saves time and prevents (now avoidable) headaches.