How Does a 3PL Logistics Company Work?

Business owners may only be somewhat familiar with 3PL logistics companies. In this article, we will discuss what such a company is, and how it can work to one’s advantage.

What Is 3PL?

3PL stands for third-party logistics. It is a service that allows for the outsourcing of operational logistics from warehousing to delivery. A 3PL company will provide a variety of services related to supply chain logistics operations.

This Includes:

  • Transport & Logistics
  • Warehousing
  • Picking and Packing
  • Inventory Forecasting
  • Order Fulfillment
  • Packaging
  • Freight forwarding

Using 3PL allows business owners to focus on other aspects of their business.

How Does 3PL Work?

By handling the packing and shipping of products, 3PL services allow business owners to remain competitive in the marketplace. It is crucial to offer quick shipping to customers, and 3PL services can manage this. 3PL companies provide an efficient and cost-effective service as they specialize in supply chain management. This permits them to optimize the fulfillment, distribution, and shipping processes.

Benefits of 3PL Services

There are many advantages to partnering with a 3PL company, aside from the ability to focus on other aspects of one’s business.


Handling shipping logistics can be a daunting proposition for most business owners lacking experience in the field. It is therefore much easier to outsource these duties to a 3PL company who has extensive knowledge and experience in logistics. A business owner can rest assured that their logistics needs are being addressed in the best possible manner.

Cost Reduction

3PL companies have more flexibility with freight companies than individual shippers do. This allows them to negotiate pricing according to volume and frequency, and cost savings can be passed on to business owners. Money saved on supply chain management can in turn be invested in other aspects of one’s business to help that business grow.

Improve Customer Satisfaction

Companies like Amazon have standardized quick shipping, be it same-day or next-day. By partnering with a 3PL company, business owners can provide customers with the same competitive shipping standard.

Explore Untapped Markets

Since these companies offer 3PL warehouse services, business owners can test new markets. All without having to invest significant sums of money in warehousing space or staff.

Reduce Risk

3PL companies will address any shipping delays that occur, providing alternate arrangements. If, for whatever reason, an item in transit is damaged or lost, a 3PL company will assume the cost.

Handle International Orders

International orders require documentation, customs, duties, and more. Handling all of this thoroughly and efficiently can be overwhelming for most businesses. Thankfully, 3PL companies have the expertise to manage such matters. By partnering with such a company, one can ensure that international shipments are processed smoothly, without delays or additional fees.

When to Employ a 3PL Company

Although it is always beneficial to partner with a 3PL company, there are instances when doing so is particularly important:

More Inventory Space Required

As businesses grow, and the number of orders increase, more warehouse space is required for inventory. 3PL companies allow business owners to better store and manage their inventory.

High Volume of Orders

Businesses shipping a high volume of orders per month could especially benefit from outsourcing their shipping and logistics to a 3PL company. 3PL services include the kitting, assembly, and preparation of items for shipping. This can become time-consuming and costly at high volumes without the benefit of 3PL services.

Need for Accelerated Shipping

As mentioned earlier, businesses now need to compete with the quick shipping services of companies like Amazon. To increase the speed of one’s logistic services, business owners should partner with 3PL companies and remain competitive.


As outlined in this article, there are many advantages to partnering with a 3PL company. Consider these points and contact us today!