The majority of eCommerce businesses have been outsourcing logistics from fulfillment service providers for online shopping. It was the source of expansion for the 3PLs (Third Party Logistics partners) in 2021. According to a Slovakian 3PL Fulfillment Services spokesperson, this outsourcing has expanded in the European market.
According to GlobeNewswire, the 3PL market will witness massive expansion of 8.8% between 2022 and 2031. It’s because retailers and manufacturers are focusing on core competencies and trade activities have accelerated because of globalization.
To stay at pace with the global marketplace, product companies should depend on several partners to streamline their supply chain. A qualified and expert 3PL service provider can match up every on-demand needs for the consumers to several analog procedures which comprise the supply chain, such as warehouse support, transportation, carrier relationships, shipping, and many more.
Table of Contents
What Is a 3PL?
3PL logistics partners help companies outsource supply chain-related tasks. Essentially these are organizations that provide compact and one-stop solutions for the overall enterprise supply chain. These services can recognize the supply chain gaps and fill them with apt solutions.
According to Red Stag Fulfillment, leading 3PL companies embrace automated API integration. The software connects with the online store through an API for an automated and seamless process. There’s no need to upload or email orders. The system is apt for making the API fulfillment precise and accurate for their clients.
Advantages of 3PLs in Supply Chain Management
eCommerce and other companies can integrate the technologies, best practices, and expertise of 3PLs in their business process and resolve complex logistics issues. It makes the supply chain agile and responsive, which is imperative in the competitive and uncertain marketplace.
A few of the advantages are:
1. Transparency
3PL services make the supply chain smooth by providing a real-time view of several moving parts, their blockages, efficiencies, and problems. When there is transparency, companies arrive at smarter decisions for their supply chain. It helps to interact with carriers as they tackle several bottlenecks, like traffic congestion, unfavorable weather, and lengthy service constraints.
They function as fulfillment centers that manage and store product multiple times when it is in transit. It also looks into the coordination of inventory, parts, assembly, special shipping, and packaging requirements.
3PLs have the exact data and real-time updates on the product’s location, packaging, and movement. They know the time when it will arrive at the destination. All this information provides companies with actionable insights to make the necessary changes to the supply chain logistics. It further helps to increase efficiency.
2. Provides Industry Specifics
An expert 3PL service provider will understand the specific needs better and provide apt solutions.
For instance, if yours is an electronic brand, your products will have a lithium battery. The industry labels it as “dangerous goods,” needing careful management and shipping. The 3PL company caters to all the rules and regulations for shipping such a product. It means they have the required tools, expertise, and personnel to add value to the products as it moves through your supply chain.
Another example worth considering here could be the customer health products, clinical devices that need FDA compliance, and perishable goods. There is no need for the 3PL company to have in-depth know-how about the minute details of a specific industry. But knowing always helps.
What is crucial here is how correctly the 3PL can offer the required insight to the supply chain. That way, they can provide the necessary guidance on maximizing the supply chain leading to a competitive advantage.
3. Transportation Savvy
An expert 3PL company will have the experience to navigate several transportation intricacies. Transportation is challenging as it includes different modes of transport, several choices for time and speed, and different quality and service levels.
The shippers know and realize the complexities that are present. However, the correct 3PL will have meaningful knowledge. The logistics provider manages the shipping of various products. Hence, they are aware of best practices, trends, and inefficiencies which a single business owner might not foresee.
It provides them with the distinctive capacity to benchmark the services and costs depending on previous know-how and long-term data analysis.
Conclusion
The function of the 3PL company in the supply chain is to generate business growth by providing brands with access to a market where there isn’t any established presence. It is necessary to effectively manage inventory in the market without paying for labor, device, and warehousing.
It helps companies to save money and other logistical issues that are prevalent in a new market.