What is the true Definition of A Third Party Logistics Provider?

According to Wikipedia:  A third party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides service to its customers of outsourced (or “Third Party”) logistics services for part, or all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers’ needs based on market conditions, such as the demands and delivery service requirements for their products and materials.
Often, these services go beyond logistics and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. When this integration occurs, the provider is then called a third-party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP).
3PL targets a particular function in supply management, such as warehousing, transportation, or raw material provision.

A standard definition of just what a third party logistics provider is can vary from contract to contract. Is everyone who thinks they are engaged in a “third-party contract” really involved in a “third-party contract?”
If a distributor, for example, has a truck pull up to their door a few times a day or week to deliver goods to their customers, is this truck their 3PL provider? The answer is NO.

The definition of a third party logistics provider is as confusing as the term supply chain. Even logistics professional struggle with the term. Many companies refer to trucking, ocean freight services or warehousing as 3PL Services.
Warehousing, transportation and storage by itself is not considered 3PL Services and the company that warehouses and transports the goods is not necessarily a 3pl provider. It is just a warehouse or a transport company.

Many companies require a transport company to deliver the gods from point A to Point B since it does not make sense in some cases to own your own trucks. These transport companies might not be 3PL providers. If that transport company is involved in the warehousing and distribution of the product then it can be called  third party logistics provider.

Many freight forwarding companies and shipping companies have added services to become 3PL Companies. For example, large freight forwarders will ship your container, handle the necessary customs paper work, deliver the container to their warehouse and distribute the product to end users.

Keep in mind that 3PL companies outsource some of the services to other 3PL companies, for example a customs broker who wants a piece of the action outsources warehousing and distribution to other companies while they appear as the provider of these services.

Is it a wise decision to outsource all these functions to one 3PL Company?

The answer is : it all depends on the end result. in some cases, the 3PL provider is unable to give provide the best transportation rates including ocean or inland therefore, a company my opt to use another 3PL provider. This has given rise to 4PL Companies that will manage the other 3PL companies making sure that the customer gets the best service and the best rates possible.

What is a 7PL Company ?

7PL is still considered a concept. Some 4PL companies offer back office support such as accounting, customer service, billing and receivables management. This concept is called by some 7PL Services. This concept is becoming a reality very quickly.

In a nut shell, the number of companies calling themselves 3PL providers has risen but the reality is that most of them do not offer the true services a 3PL is supposed to provide. As mentioned earlier providing these services without integration.

Whether it is a third party logistics provider, a fourth party logistics provider or a 7PL Provider, the bottom line is which one will be able to offer end to end solutions.

3PL is a term used for many different types of logistic providers. Each type has its own strengths and weaknesses so be sure to choose the one that fits best with your goals.

3PL Companies, in order to succeed, have to work with their clients as partners. One vision, one goal.

Here are some of the reason why you should consider a third party.

Lower Rates

When you choose to work with a 3PL you can take advantage of lower rates. Typically, logistics providers have special rates they can provide you with to help save you money in the long run.

Lower Risk

When you work with a 3PL you can start to build an efficient, multi-location distribution network with a lower risk. Without a third party logistics partner, you would have to invest significant capital to build up a distribution network.

Extra Resources

When you work with a third party logistics provider you gain all of their resources as your own. Each provider has their own resources, so make sure to pick one that fits with your needs. Below are a few resources a 3PL can provide.

• Equipment
• Personnel
• Technology/Software

International 3pl continues to be a leader in Innovation.

Understanding the Difference between 3PL Providers and Freight Forwarders

In the world of global transport, understanding the differences between supply chain management, freight forwarders and 3PL Providers (3PL) is key. In order to make the best decisions for a company’s transportation and supply chain needs, knowing the difference is vital to the safe and successful transportation of goods from the manufacturer to their end destination.

Freight forwarders move freight from one destination to another, be via road, rail, air or ocean.  Third party logistics companies may perform freight forwarding services simply by providing their common services: moving, storing and processing inventory. Both services relieve a company of managing the minutia of transportation, its paperwork, changing of freight providers, adhering to regulations and for some, paying of duties.

Freight forwarders specialize in the moving of freight.  They are experts in this part of the overall supply chain.  Freight forwarders are not always the transportation companies themselves (although they can be), but more often than not contract with various carriers to ensure maximum options for their clients.  Freight forwarders may choose to work both domestically and globally, therefore working with all modes of transport.  Or they may choose to specialize even further and only work within the domestic space or international space.

Third party logistic providers help move the cargo as mentioned above, but then add extra services, such as storing cargo between transport steps and processing shipments.  Many clients ship their cargo from arrival to various warehouse or distribution centers.  3PL Companies will take items from the transport vehicle and package it with an invoice per each client drop off.  Like a freight forwarder, 3PL providers also work with various authorities and carriers to process paperwork, waybills and invoices as well as paying any fees on behalf of the client.

Both providers will perform the necessary service of ensuring cargo arrives in good condition and meets all regulations and any duties or fees are paid.  But 3PL Providers will perform additional services based on client need.  There is a need for both in the supply chain and deciding which is best is based on company needs, budget, current orders and forecasts.  As with any other service provider, the company must first perform an internal analysis to see what is truly needed and where possible cost savings by outsourcing will come.

Many clients may find that working with a freight forwarder partner who also provides 3PL services is a beneficial way to manage transportation needs when working with an outside vendor.  Knowing that basic freight needs will be accomplished, but there is also the option to add services creates a value added benefit.

The list is growing

Thanks to our innovative conceot and our customers service our list of trading partners is growing.  Our partners and customers alike understand and appreciate the value of the service we are offering.

We have 3pl partners from around the world, accommodating different types of clients with various needs. our clients range from small to large international corporations. Our unique organizational structure and service philosophy allows us to be flexible and acommodating to the greatly differing needs of businesses at both ends of the spectrum.

No matter what your logistics needs, we have the right people to service you.

Read More at: https://international3pl.com/

While there’s definitely more many reasons why a company might look for  a third party logistics provider here are a few reasons:

• To provide supply chain support to penetrate new regional markets or countries where your company doesn’t currently have a presence without the costs involved in such venture
• If you are a company whose business is seasonal in nature using a 3pl provider allows you to cut the operating costs.

• To increase on-time performance and increase efficiency with the management of your inventory by using a 3PL provider that has the technology and capability to deliver an effective solution.

• To take advantage of lower transportation rates provided by logistics firms that have  buying power due to the volume of freight they deal with.

• To quickly build a multi-location distribution network with lower risk, without the significant capital investment associated with building out a network on your own.
• By using a 3PL provider, you can divert your resources to grow your business by engaging in new marketing strategies