The term logistics remains an enigma, many people associate the term logistics with shipping. By definition logistics is the movement of goods or services from point A to point B however, the definition fails to add on all the other activities needed to facilitate such movement including custom clearance, drayage and final delivery to point B
To make matters more confusing, we have terms such as supply chain and procurement that are used in its place of logistics. Too set the record straight, logistics, shipping, transportation, etc. are part of the supply chain umbrella and then came the term “third party logistics” which people somehow associate with warehousing.
The first 3PL companies started it out as freight forwarders who opened warehousing and delivery and then expanded to other services.
Any warehousing company or trucking company can call itself a 3PL that is why you need to check the services that company offers.
A true 3PL company offers a multitude of services such as:
- Ocean and air freight services
- Inland transportation
- Order fulfillment or pick and pack
- Warehousing services
- Cross dock services
- Customs clearance
- Packaging services
- Inventory control
Lately, many associate the term 3PL with order fulfillment.
Now, keep in mind that not all 3PL companies are created equal. In reality, only a few of the 3PL companies that show up on search engine searches are a true 3PL company; most of them just offer warehousing services.
A 3PL company should be able to take over your day to day fulfillment needs.
After a careful research you will find out, hopefully not the hard way, that only a few can deliver a solution.
A true 3PL company should be able to pick up the goods from your vendor and deliver them to the end user transparently with a continues flow of goods and information.
In a time where online shopping is blooming, thanks to Amazon, many small to medium size companies are outsourcing their fulfillment services to 3PL companies taking advantage of their expertise and off course cutting the operational cost.