What does a third party logistics company do

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3PL Links provides a variety of third party logistics solutions for businesses in North America and around the world. Visit their website today!

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What does a third party logistics company do

  1. 1.  A third party logistics company is an independentbusiness that specializes in providing a specific type ofservice to a larger client. The majority of companies focus on one aspect of thesupply chain such as shipping. The purpose of a third party logistics provider is toimprove the efficiency of a client and to help controlcosts. This is done through the economics of scale.
  2. 2.  Logistics providers like supply chainconsultants and couriers produce over $47billion each year. Areas like transportation and warehousingare growing annually at a rate of between 5and 6 percent. Third party logistics companies perform anumber of different functions.
  3. 3.  Many third party logistics providers offer someform of warehousing. This means that a client business can hire thecompany to store products in a controlledfacility that is managed by the provider. This is an attractive option because it removesthe need to lease a warehouse and payemployees who are only tangentially related tothe core business.
  4. 4.  The third party provider usually makesextensive capital investments in thewarehouse allowing for increased efficiencythrough modern technologies. Another advantage is that a provider mighthave warehouses in centralized areas thatmake shipping and receiving easier.
  5. 5.  A number of third part logistics companiesoffer transportation services. This is one ofthe most common services provided. Transportation involves moving goodsbetween two locations. This could be from acoastal port to a warehouse or from one retailstore to another.
  6. 6.  Transportation does not usually include otherservices such as warehousing or consulting. Transportation across different jurisdictions isnormally an invaluable service since localbusinesses do not have the capital to invest intrucks and licenses that would allow for cross-country transport of goods. Many transportation providers have large fleetsof trucks available that can move goods betweenlocations quickly and efficiently.
  7. 7.  An increasingly popular type of third partylogistics is fulfillment. This is a version ofwarehousing. Fulfillment means that a provider storesitems in a warehouse and then assemblesdifferent collections of items in a box or othercontainer.
  8. 8.  This is how orders are usually filled forecommerce and catalog companies. The warehouse maintains pickers, packersand other employees who can fulfill orderswith a high level of accuracy and speed.
  9. 9.  Most will also provide shipping servicesthrough another third party logisticsprovider. Fulfillment providers sometimesinclude value added services such as returnsprocessing.
  10. 10.  There are third party logistics companies thatact primarily as consultants. These companies do not maintain assets likea warehouse or a fleet of trucks.
  11. 11.  The goal of these companies is to streamlinethe supply chain and sometimes to developan entire efficient supply chain for a newbusiness. Supply chain consultants specialize inremoving waste and overhead from theprocurement, warehousing and transport ofgoods.
  12. 12.  The knowledge and experience of theseindividuals usually results in a collection ofasset-based third-party providers who canwork together more efficiently than a groupof random businesses assembled without theassistance of supply chain consultants.

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