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What is 3PL logistics?

Third-party logistics, commonly known as 3PL, plays a pivotal role in supply chain management. However, if you’re new to this industry, you may not be familiar with the intricacies of 3PL and what it encompasses.

At Quickmail, we live and breath 3PL! In this blog we delve into the world of warehousing, fulfillment services, and distribution to provide a comprehensive understanding of 3PL logistics and its significance.

What is 3PL logistics?

In simple terms, 3PL stands for third-party logistics, referring to the provision of outsourced logistics services, which often encompass procurement, fulfillment, transportation, and warehouse storage. For instance, in a 3PL arrangement, if you’re selling a product, these providers manage the entire process, from consumer ordering to product transportation and online fulfillment, ensuring the swift and reliable delivery of products to customers.

3PL offers substantial cost savings to businesses, allowing them to scale as they grow and eliminating the need for businesses to invest in their own offices, warehouses, and distribution networks. Many eCommerce stores turn to 3PL for an efficient and expedient solution to supply chain management.

Why is 3PL so crucial?

3PL has been gaining popularity among online stores and eCommerce groups for many years now due to its affordability and scalability for retail businesses. 3PL companies specialise in their services, offering more cost-effective rates for shipping, warehousing, and overall supply chain management. This relieves businesses of the logistical burdens and ensures a seamless and dependable process. Customers benefit from experts handling their freight, saving them significant time.

Businesses focused on growth and streamlining their supply chain rely on 3PL to maintain strong profit margins and avoid the costly storage space and expenses associated with fulfilling and shipping products themselves.

While every third-party logistics provider is unique, their capabilities generally encompass a complete solution, including product storage, transportation, distribution, and shipping and receiving.

Advantages of 3PLs

  • Reduced Overheads: By not needing to lease warehouse space or employ an in-house fulfillment team, businesses can cap their operating costs based on their fulfillment needs, allowing funds to be redirected toward growth and expansion.
  • International Expansion: 3PL providers can manage all the documentation, accounting, paperwork, and duties associated with shipping products overseas, making international expansion more accessible. Engaging a 3PL in the target country can enhance shipping and delivery times, improving the customer service experience.
  • Specialisation: 3PL companies are experts in order fulfillment and supply chain management, enabling businesses to focus on their core areas of expertise. They excel in transportation services, distribution, pick-and-pack, and warehousing, often delivering pick accuracy rates of 99% or higher, ensuring reliability and professionalism.
  • Fast Delivery: A key advantage of 3PL is its ability to provide fast shipping. Optimized product delivery enhances customer satisfaction, often leading to repeat business and positive word-of-mouth. National 3PL networks can strategically position stock across the country, reducing shipping times and costs.

Key Considerations for Comparing 3PLs

Competitive Pricing: Evaluate the cost structure of different 3PL providers over a 12-month period based on your specific business assumptions.

Service Level Metrics: Assess the quality of service based on factors such as pick/pack accuracy, on time dispatch, inventory accuracy, and turnaround time.

Customer Service: Consider how the 3PL handles issues and communicates when problems arise, as this can greatly impact your experience as a seller.

Comprehensive Reporting: Ensure you have access to inventory and order status information, ideally through a customer portal, or via regular email updates. Advanced reporting tools can aid in optimizing your supply chain.

Scalability: Verify that the 3PL can accommodate your business’s growth, both in terms of physical space and well-defined processes for peak sales periods.

Integration Capabilities: Look for 3PLs that can seamlessly integrate with your shopping cart, marketplace platforms, ERPs, and inventory management software. These integrations should save you time and streamline order fulfillment.

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Reviews and References: Although reviews may be imperfect, they can offer insights into a 3PL’s performance. Consider seeking references from businesses similar in size or industry to gather more reliable feedback.

Before partnering with a 3PL, thoroughly assess these seven criteria to ensure they align with your business’s needs and objectives.

Quickmail is a well established West Australian communications hub, that has successfully been in business since 1992. We have continually grown through investment in new technologies, new areas of opportunity and development of our staff. This has ensured that we are current in today’s fast moving market and are always able to deliver our customers the best communication solution possible.

We have strong:

  • Market Expertise
  • Customer Focused Strategies
  • Integrated solutions
  • Quality Control
  • Competitive Pricing

Our vision is to provide a reliable, fast service with family values which diligently pursues the provision of the highest quality products and services through innovation, technology and talent.