Definition of Third Party Logistics Company (3PL) in 100 Words

Definition of Third Party Logistics Company (3PL)

A third-party logistics company (3PL) offers outsourced logistics and supply chain service solutions for shippers. A company can outsource all or just a portion of their logistics requirements.

According to Armstrong & Associates the third party / contract logistics market size is $ 184.3 billion.

90% of Fortune 500 Companies utilize a 3PL in their logistics and supply chain strategy.

3PL Logistics Video

Third Party Logistics Services:

  • Freight Brokerage

  • Freight Management

  • Freight Consolidation

  • Freight Audit & Pay

  • Inventory Management

  • Warehousing

  • Order Fulfillment

  • Final Mile Customization

  • Technology

When companies outsource logistics functions, they can either choose a single service or bundle the above services to craft a customized logistics services solution that best fits their company’s needs.

Third Party Logistics Benefits:

  • Cost Savings

  • Reduce Capital Requirement

  • Scale & Flexibility

  • Gain Expertise & Knowledge

  • Technology

Third party logistics service relationships can be:

  • Transactional
    • The 3PL is used on an as needed basis with no long-term contract.
  • Tactical
    • The shipper and 3PL have a negotiated long term agreement outlining services and prices.
  • Strategic
    • The shipper and 3PL have a negotiated long term agreement outlining service management fee, with a pass through on all costs making for a fully transparent relationship.

Professional Organizations Associated with 3PL’s:

  • Counsel of Supply Chain Management Professionals (CSCMP)
  • Transportation Intermediaries Association (TIA)
  • International Warehouse Logistics Association IWLA)

Other Articles of Interest:

  • When to Use a Freight Broker in Your Logistics Strategy
  • The Ultimate Comparison Guide on Freight & Logistic Services
  • Benefits of Managed Transportation Services: Comprehensive Guide
  • How Much Does Managed Transportation Services Cost? A Comprehensive Pricing
  • Comparison between Freight Broker and Managed Transportation Services Freight Operation Models

It’s a learn more about Intek Freight & Logistics and the logistics industry, we invite you to visit our website and subscribe to our weekly blogs.

Similar Posts

Leave a Reply

Your email address will not be published.