Third Party Logistics (3PL)
Warehousing, Transportation, Order fulfillment and Inventory Management and Optimization. We’ve all heard these terms before. But, did you know how tightly linked they are to a third-party logistics provider? Many companies in today's day and age rely on logistics providers to help scale and enhance their business. Companies like Amazon, Walmart and Grainger all use 3PL’s. And, with the growth of e-commerce and the growing complexity of today's supply chains 3PL’s are becoming a must have for almost every organization. So, what exactly is a 3PL?
What is Third Party Logistics?
3PL is an abbreviation for third party logistics. Formally defined, a 3PL typically includes a buyer and supplier relationship that outsources the supply chain operations and/or logistics and delivery services. 3PL’s generally offer many different specialized Logistics solutions. Some examples include:
Let’s simplify this concept.
Seems pretty simple, right? Maybe. But why would a company want to use a third party logistics company? While there are many different reasons that organizations use third party logistics some of the main reasons include:
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