For those who are not in the e-commerce space, 3PL can be a new and intriguing term. 3PL, commonly known as third-party logistics companies, plays an essential role in bringing the stuff you like online to your doorstep.
These companies work in the background to ensure that your online shopping experience remains seamless. All popular sites like Shopify, TikTok, Instagram, WooCommerce, and more rely on reputable 3PLs like TrustWorks in Los Angeles.
Demand for third-party logistics companies is on the surge with the rising evolution and penetration of the internet globally. In this article, we will try to understand what 3PL is and what are its basic operations.
What is a 3PL?
Third-party logistics, or 3PL, are companies that provide a wide range of logistic services to other businesses. They allow businesses to make their operations and supply chains more efficient.
3PL companies like TrustWorks handle all backed processes, including warehousing, distribution, freight forwarding, order fulfillment, return processing, and supply chain management.
These companies also provide technology and tools for businesses to help them automate their order fulfillment process and make it more efficient. Businesses have relied on 3PL companies since the 1970s, but their true growth began in the 1990s after the expansion of Internet and retail businesses globally.
Without 3PL companies, businesses simply cannot thrive. They bridge the gap between both B2B and B2C companies. Relying on 3PL partners allows businesses to focus on core business areas like marketing, customer relation building, scalability, risk management, and reducing operational costs by a huge margin.
What are the basic operations of 3PL?
Now that we know what 3PL is, let’s understand their basic operations in detail.
Warehousing & Storage
Warehousing and storage are the most fundamental operations in 3PL services. It includes the physical storage of goods and products at dedicated facilities managed or owned by the 3PL companies. These warehouses are strategically located to speed up distribution and reduce transportation costs.
The 3PL company is responsible for maintaining proper storage conditions, like temperature control for sensitive items, security measures for preventing theft or damage, and detailed organization of products.
They also manage inventory levels to ensure that stock is rotated properly, which helps with obsolescence. 3PL companies use advanced warehouse management systems to track the location and status of each item in real time.
This helps in maintaining accurate inventory counts and optimum utilization of space. This service is essential for businesses that lack the space, expertise, or resources to manage their own warehousing and storage needs.
Transportation & Distribution
No retail or e-commerce business can survive without a well-established transportation and distribution network. 3PL companies facilitate these tasks by moving goods from manufacturers to warehouses, between different storage facilities, and finally to end customers or retailers.
3PL companies usually have a vast huge transportation network which generally includes trucks, ships, planes, and trains. This allows them to move stuff across borders and pin codes, regardless of the package size. They handle route planning, carrier selection, and shipment tracking to ensure timely cost-effective deliveries.
These companies also take care of customs and usually have a high-tech tracking system that allows customers to check the movement of their packages in real time. By using their expertise and economy of scale, 3PL companies offer more cost-effective transportation solutions than what a business could achieve on its own.
Order Fulfillment
The end goal of each online business is to get their offering delivered to customers on time. 3PL companies like TrustWorks provide end-to-end solutions for this, which include picking items from inventory, packing them securely, labeling packages correctly, and shipping them out.
These companies use an advanced order management system, which helps in quick, accurate, and quick order processing. They usually offer it in the form of software and integrate it with the client’s sales platform.
Methods like batch and zone picking are often used to increase warehouse efficiency. The package is carefully backed using protective materials like bubble wrap, foam material, and sturdy cardboard boxes to avoid damage during transit.
Some 3PL companies also offer value-added services like customized wrapping, personalized notes, and aroma boxes. They also manage return processing and integrate a reverse logistic system to accept, inspect, and restock the returned items.
High-Tech Inventory Management
3PL companies offer a sophisticated and efficient inventory management system. This helps in managing accurate and real-time data on stock quantities, locations, and movements of goods.
It leads to better forecasts of demand in peak seasons and also gives indications for restocking the items before they get completely sold out. This service also saves brands from restocking, as these systems often come with the capability to judge the required quantity using algorithms and past data sets.
3PL companies often provide regular reports on inventory levels, turnover rates, and other key metrics to help their customers make informed decisions about production and purchasing of goods on time.
By outsourcing inventory management, businesses can reduce carrying costs, improve cash flow, and respond more quickly to changes in demand. High-tech 3PL players like TrustWorks help their partners by providing advanced analytics tools to help them identify trends, optimize their operations, and provide valuable insights for better decision-making.
The End Note
To sum it up, 3PL, or third-party logistics companies, are the backbone of the modern economy. They help businesses with the huge cost burden of setting up a new country-wide logistic system.
TrustWorks is one of the most famous and efficient 3PL companies, based out of Los Angeles, America. Their tailored logistic solutions, cost-effective shipping, advanced technology integration, and robust customer support network have helped thousands of e-commerce businesses scale with efficiency.
Whatever shopping for electronics, groceries, machines, clothing, medicines, or accessories you do online is finally fulfilled by a 3PL provider only. These 3PL providers are a major reason behind the success of social media shopping platforms like TikTok, Instagram, Temu, and more. In short, 3PL means less cost, better management, and happy customers.
