Third Party Logistics-The Solution for Improved Distribution and Warehousing
The term 3rd party logistics, 3PL, involves outsourcing supply chain and logistics roles to third party service providers. When you engage in the manufacturing business, then shipping logistic processes become vital. There’re many manufacturers who have business relationships with commercial carriers, postal services, airlines, and contract warehousing to have finished goods shipped from a manufacturing facility to the consumer.
However, once a finished item is ready for shipment, a 3PL provider will collect the item and deliver it conveniently to the consumer. Total costs of shipping are then billed by your 3PL to the relevant department of your company. The 3PL provider caters for shipping and transportation services and this can save the overall cost of doing business.
You will not have to buy transportation trucks or pay for cargo planes and ships to transport your goods. You will also save on costs of doing business for you will not have to hire employees in the shipping process.
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In short, 3PLs outsource and manages the products of one firm to another firm. In the global business market, firms that offer 3PL services are increasingly becoming more popular. They are now dominating the management of supply chains.
The services and support offered by 3PLs generally includes freight delivery, consolidations services, distribution, and warehousing. 3PL services are available as both local and international services.
Warehousing
Distribution and warehousing, simply known as contract housing, is convenient when outsourced to 3PLs. Warehousing is a useful facility for businesses that choose to focus more on other important aspects of a business such as designing, manufacturing, and sales.
Basically, 3PLs reduce the wage bill of a business for you will not need many employees. You will also require less space to do your business smoothly for your goods can be stored by your 3PL and distributed to consumers whenever they make orders.
Benefits of 3PLs
The main benefit of utilizing a 3PL service is the ease of transportation of products along a supply chain. Another benefit offered by 3PLs is professional shipping and handling of goods. Paperwork related to the shipments is also handled properly.
3PLs come with a concept of outsourcing to a third party, and this is a benefit of these services. For instance, when a business contracts another logistics company to manage its distribution and shipping functions, then the business saves costs on multiple aspects.
These services also enhance quality of products. Most business people believe that 3PLs offer better services in a supply chain than running the functions internally.
It is also notable that 3PLs have other advantages such minimizing business challenges and less manpower. As a businessperson, you always try as much as possible to increase profits and grow the business.
3PL service providers are the best solution for solving supply chain challenges that you might face when doing all functions on your own. Outsourcing some functions to 3PLs will ultimately benefit your business.
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