3PL (Third Party Logistics) is a provider of outsourced logistics services. A 3PL service may be a single service such as transportation or storage; alternatively it can be a multifaceted bundle of services capable of managing an entire supply chain project.
What are the benefits of third party logistics?
Businesses of all types and sizes are becoming increasingly aware that by outsourcing their logistical requirements, they are able to gain a competitive and economic advantage.
A significant reason for outsourcing logistics is that it allows businesses to focus on their core strengths and expertise. There is no efficiency in running a day to day logistical operation if that’s not where your strength is.
Outsourcing to 3PL providers opens the door to all the benefits of a fully functional third party logistics operation. For a fraction of the price, you reap the benefits of warehousing, order processing equipment, computer and software systems all of which would nothing but unnecessary overhead to your business.
In a nutshell, a good third party logistics service provider will deliver significant cost savings for you from reduced administrative overheads. More importantly, resource will be freed up allowing you to concentrate on growing your business to where you want it to be.
Supply & Demand of 3PL
While it is naturally preferred for businesses to operate in house, it has been proven that outsourcing can significantly enhance efficiency. A noteworthy advantage of 3PL, is that it can help manage your businesses demand expectations. Why expand and increase overheads and more importantly – risk. By outsourcing, you allow for a risk free and cost effective solution.
- Allows focus on your core business requirements
- Possible reduction in costs
- Helps preserve capital
- Fulfil and improve your growing distribution needs
- Deal efficiently with uneven peaks in demand