WHAT IS A 3PL?
Elanders guide to third-party logistics
Third-party logistics (abbreviated as 3PL, and in some cases TPL) in logistics and supply chain management is an organisation’s use of third-party businesses to outsource elements of its distribution, warehousing, and fulfilment services.
Before you start working with a Third-party logistics company, it’s important to understand what 3PL is. This blog serves as a guide to highlight everything your business needs to know about partnering with a 3PL provider and how to best integrate Third-Party logistics into your operations.
What do 3PL companies do?
Essentially a 3PL company acts as an ecommerce fulfilment company. It provides all the services you need to outsource your logistics operations.
Third-party logistics refers to outsourcing of processes to a third party business, this may involve inventory management, order fulfilment and often shipping. 3PL providers offer solutions for businesses looking to scale up and focus on other aspects of their business.
Whether you’re a small business looking for cost saving options or a large business struggling to keep up demand, most 3PL partners have a tailored service solution offering to suit your needs and budget.
In todays convenience economy, there has been significant growth and demand for supply chain management solutions with a trend for most companies outsourcing inbound and outbound logistic services.
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How can they help?
Working with a 3pl can be very cost efficient and save you lots of money in the long run. Some of the key areas where you save money are on warehousing storage and transportation, If most or all of these operative functions are outsourced this will lower the amount of capital required for the client’s business. This is particularly beneficial if a company’s warehouse has high variations in capacity utilisation, leading to over purchasing of warehouse capacity and in turn reducing profitability.
Save time and improve customer satisfaction
Most 3PL providers can offer express delivery options, including next day and even same day delivery which is a great selling point for your customers. With faster services and an improved user experience you are more likely to see customers return.
Gain expertise & knowledge
Supply chain logistics can be complex and time consuming, one of the benefits of partnering with a 3pl allows you to tackle the challenges of fulfilment, warehousing and shipping with experts by your side.
With Elanders you have a dedicated account manager on hand who can offer advice and knowledge to prevent logistics having a massive impact on your business.
The inability to access global resources is a major constraint for many businesses who wish to expand their reach internationally.
We offer worldwide shipping as we have warehouse facilities not only across the UK but also in Europe, Asia & North America! So no matter where in the world you are, or whether you are looking to trade in the UK post-Brexit, The EU or Worldwide, we’ve got you covered.
Elanders UK is part of the Elanders group with over 100 locations across the globe and 1.5 million total m2 of production and warehouse space.
Working with different sectors
Elanders is for industry. We’ve got a solid track record when it comes to helping a huge range of brands solve their most complicated print and logistical problems with a range of innovative, bespoke print & supply chain solutions.
What common 3PL services include
Third-Party Logistics providers (3PLs) offer a wide range of services to businesses, depending on their specific needs and requirements. Here are some common services provided by 3PLs:
Omnichannel Fulfilment & Returns Management
3PLs manage the order fulfilment process, including order processing, picking and packing, shipment tracking, and returns management. They ensure accurate and timely order fulfilment to enhance customer satisfaction.
Streamlining your returns process is a crucial part of the customer shopping experience, 3pls can help your returns management process by handling returned orders and even integrating with returns software solutions to further streamline the experience for your customers. You may choose to have returns restocked, quarantined, or disposed of, while gaining full visibility into ecommerce returns for future planning.
Warehousing and Distribution
3PLs provide warehousing facilities for storing inventory, managing stock levels, and order fulfilment. They handle activities such as receiving, storing, picking, packing, and shipping goods. Additionally, they often offer value-added services like kitting, customization, labelling, and repackaging.
3pls handle the management and coordination of transportation services, including selecting carriers, negotiating freight rates, optimizing shipping routes, tracking shipments, and managing freight documentation.
B2B & DTC Fulfilment
B2B (Business-to-Business) and DTC (Direct-to-Consumer) fulfilment are two specific types of order fulfilment services that 3PLs offer.
3PLs that provide both B2B and DTC fulfilment services have the capability to handle the diverse needs of businesses selling to other businesses and directly to consumers. They leverage their expertise in managing different order profiles, inventory strategies, and shipping requirements to ensure efficient and accurate fulfilment for their clients.
3PLs handle the movement of goods across various modes of transportation, including air, sea, rail, and road. They coordinate with carriers, manage documentation, and ensure smooth transportation from origin to destination.
3pls like Elanders are committed to helping brands grow their brands globally in markets like the US, Canada, Asia, The EU, and more. When all of a 3pl’s fulfilment centres run of the same warehouse management system, use the same SLAs, and utilise the same support team, you get a true international fulfilment solution with one login to manage all warehouses, orders, inventory, and more.
Some 3PLs offer additional services such as product labelling, packaging customization, product assembly, reverse logistics (returns management), and order customization to meet specific customer demands.
You can offer branded, personal gift notes and custom packaging to your shoppers via 3pls like Elanders and have them printed and packaged in house to reduce cost and complexity.
3pls help businesses optimize their inventory levels by utilizing advanced systems and technologies. They track inventory levels, implement inventory control measures, conduct cycle counts, and provide real-time visibility into stock availability.
Technology and Analytics
3PLs leverage advanced technologies like Warehouse Management Systems (WMS), Transportation Management Systems (TMS), and data analytics tools to provide visibility, track performance, optimize operations, and generate insights for continuous improvement.
Data can be a competitive advantage for brands. 3pls like Elanders offer free analytics and customised reporting dashboards so that you can dive deeper and have full transparency of your stock levels, orders and costs.
How does 3PL pricing work?
Fulfilment costs vary depending on what 3PL and distribution centre you partner with and their pricing model. Generally speaking, since there is no one-size fits all fulfilment solution, there is no one pricing that fits all businesses.
Typically when initiating a conversation with a 3PL and discussing the services you’re interested in a SLA (Service Level Agreement) and contracts will be produced to discuss planning and pricing ensuring that you aren’t left in the dark on how much you’ll be paying for fulfilment costs.
Elanders offers transparent, custom pricing with no hidden fees and you may find that it saves you a fortune on your existing overheads.
What about 4PL?
When researching 3PLs, you may come across the term 4PL. 4PL companies often offer end-to-end supply chain management for a client including 3PL services, manufacturing, inventory procurement, and more.
Fourth party logistics (4PL) and third party logistics are both service based solutions that help businesses plan and executive logistics initiatives
If you’re asking yourself what is the difference between a 3PL and 4PL, simply put a 4PL oversees and handles the entire supply chain operation whereas a 3PL generally focuses around the logistics side. Both service are available at Elanders dependant on the needs of our partners.
How Elanders can help
Elanders works with brands in different sectors across the globe to fulfil multichannel orders. We understand how big of a decision it is to partner with a 3PL so we offer complete transparency from beginning to end and as you grow, we grow with you by continuously investing and improving technology and automation.
With decades of operational experience and a thriving company culture we also offer:
A wide range of customized solutions catered to your needs.
Worldwide shipping facilities
Access to a quality cloud-based WMS (Warehouse Management System) with the ability to track orders and stocks in real-time.
We can ship DTC (Direct to customer) or B2B (Business to Business) customising how items are packed to suit branding
Dedicated account manager
To join businesses, just like yours, by using Elanders for your ecommerce orders contact us here. Once you fill out the form, you will get in touch with a rep who will help you understand if we’re a good mutual fit for your business.
From there, you can connect your sales channels, configure your shipping options, send us your inventory, and complete the setup of your store(s). Once all is ready, Elanders can start fulfiling your orders. As soon as an order is placed, we pick, pack, and ship it how you like – whilst you focus on the other important elements of your business.