It is critical to invest wisely in your ecommerce business to make it a continued success. There is always one constant factor to consider – the consumer. One of the major aspects of a business is the process of getting your finished product across to the end-consumer.
All businesses must navigate getting their products through the supply chain from the producer, to the supplier, through assembly or post-production, storage, picking, packing, and finally the all important customer’s doorstep. If customer satisfaction or growing your brand is your ultimate goal, the parts of your supply chain that need the most attention are fulfillment and last mile delivery. Here are some basic concepts that will help you understand how to outsource for these crucial parts of your product supply chain.
What is a 3PL Logistics Provider?
A 3PL (third-party logistics) is an outsourced logistics and transportation company. As a business owner, a 3PL company shouldn’t just be your middleman but also an actual reliable partner. The right third-party logistics provider will save you cost in the long run and increase your overall operational efficiency, leaving you with more resources to grow your brand and iterate on your product offering.
Some of the core features of a 3PL include:
- Storage and warehousing processes
- Distribution of numerous raw materials and finished products
- Unification between domestic and international freight
- Support with cross-border shipping and customs clearance
- Proper haul management to customers
- Order fulfillment processing
- Handling both inbound and outbound cargo
Some benefits derived from working with a 3PL provider include expedited shipping of goods to their destination, increased accuracy when it comes to inventory management, while not necessarily requiring a large initial capital outlay. They also provide refined cargo tracking, and accurate delivery of shipments without having to deal with the hassle of managing the process yourself.
Below are some of the important roles played by a 3PL logistics provider in the successful management of every business’s supply chain.
If you’re on the hunt for a great 3PL use this comprehensive list of questions to vet your fulfillment provider. It covers everything from facilities and operations, to technology, to customer service, and much more.
10 Vital Roles of 3PL in Supply Chain
1. Concentrating on Core Competencies
Partnering with a 3PL will enable you to zero in on your company’s key accomplishments rather than being bothered with tasks which need to be dealt with, but aren’t really core competencies of your company. This way, your business will benefit from 3PL logistics expertise and not have to worry about making use of internal resources like staff, transportation, order fulfillment, and warehouse space.
2. Access to Highly Skilled Experts in the Industry
If you are looking to expand your business internationally, then a 3PL logistics company will literally hold your hand and guide you towards making the best decision. This is because they have high level expertise in how the international market works, if your product will be greeted with open arms, or even the various pricing systems.
A 3PL provider has the knowledge and experience to advise you on where and where not to pursue expansion. They are knowledgeable in matters such as international compliance and economic regulations, freight information, transport documentation, import, and export.
A 3PL will assess all the phases in your supply chain, make you avoid costly mistakes, identify recurring problems, enhance and make them better. They basically make your entry into the international market smooth and stress free.
Is your 3PL not meeting SLAs?
Our dedicated account managers can help optimize your inventory management and track delivery performance, so you can work on growing your business.
3. Ability to Adapt and Adjust to Decreases and Increases in Sales
Third-party logistics providers enable your company to adjust and either expand or contract if there happens to be a decrease or increase in the market prices. They provide you with the industry’s best practices according to what the market is saying. You will be able to make use of supply and demand resources so no huge loss is incurred if there is a drop in prices, nor would you lag behind when there’s an influx of demand.
Most 3PL companies always make investments in technologies. This allows them to adjust and modify their operations according to the latest tech advancements in the field of logistics.
4. Saves You Time and Money
Outsourcing order fulfillment to a third-party logistics helps to cut down on cost and save valuable time. Instead of making use of the limited network of your company’s internal logistics operation and services, a 3PL will help you minimize the costs of your supply chain management and even be able to offer discounts along the way.
They help you save cost on making huge infrastructural investments like building a warehouse; purchasing trucks for transportation services; tracking technologies; staff; and even huge insurance deposits to insure all of the supply chain infrastructure that is required. On the bright side, you can use these savings to take care of some other principal goals that you have set aside for your business.
5. Widens Your Market Reach and Grows Your Business
Because you are able to save costs, you will be able to grow your business opportunities to a larger extent by utilizing 3PL logistics. You have to realize that partnering with a 3PL grants you the ability to expand your market reach, explore and put to good use the resources that you thought you would never be able to possess. This would result in a significant increase in your organization’s productivity.
6. Advanced Technology and Data Integration for Real-Time Insights
Incorporating real-time data through advanced management software and EDI (Electronic Data Interchange), third-party logistics companies provide accurate supply chain visibility for businesses. These technologies include warehouse management systems (WMS) and transportation management systems (TMS), which help shippers and ecommerce companies monitor inventory levels and optimize order fulfillment.
By accessing these technologies through a 3PL provider, businesses can make informed decisions, reducing shipping costs and improving customer experience.
7. Risk Management and Compliance for Global Shippers
A third-party logistics provider supports ecommerce businesses by navigating international compliance and freight forwarding regulations. 3PL companies are experienced in managing disruptions and adapting to economic changes, especially post-pandemic.
By aligning with service providers familiar with customs and import/export requirements, businesses mitigate risk and maintain a resilient supply chain management approach, ensuring smooth delivery to the end customer.
8. Scalability and Flexibility for Seasonal Peaks
3PL services provide scalable solutions to meet fluctuating demand, allowing shippers to expand or contract warehouse space and fulfillment center resources. During peak periods, such as holidays, a third-party logistics provider can quickly adjust logistics operations and streamline processes. This flexibility supports cost savings by reducing the need to invest in own warehouse space or additional staff, allowing businesses to focus on their core competencies.
9. Sustainability Initiatives in 3PL Operations
As customer needs shift toward sustainability, many third-party logistics companies are adopting environmentally conscious practices. 3PL providers use cost-effective and eco-friendly packaging, route optimization, and sustainable warehousing. Businesses can promote a positive environmental image by choosing a 3PL partner with a commitment to sustainable logistics practices, contributing to customer satisfaction and supporting corporate social responsibility goals.
10. Efficient Reverse Logistics Management for Better Customer Satisfaction
Handling reverse logistics—or return processing—is crucial for customer satisfaction and loyalty. A third-party logistics provider often manages returns efficiently, from processing refunds to refurbishing goods for resale. This process is simplified through fulfillment services offered by the 3PL warehouse, allowing businesses to save on costs while maintaining a positive customer experience.
Bottom Line
Since part of every business’s goals is to make consumers happy and satisfied, then assuredly, with all that has been stated above, making use of 3PL logistics is a successful avenue to achieving that. In effect, making use of a 3PL will produce on-time deliveries, improved services, accessible customer care services, and reliability on your brand name. This will ultimately result in a greater retention of your customers.
If you’re looking for a 3PL with fulfillment centers in cities across the US, we own and operate facilities in The Bay Area, Los Angeles, and Kentucky. Use DCL’s national footprint of warehouses to distribute your inventory across the country to reduce transit times and save on shipping costs. If you need fulfillment or shipping support and want to partner with DCL Logistics, we’d love to hear from you.
