3PL Third-Party Logistics Services

Third-party logistics, also known as “3PL”, help organizations without their own warehouses with critical logistics needs like management of shipping, order fulfillment, and storage. For instance, a 3PL logistics company offers storage, inventory management, and freight shipping services.

These companies enhance the logistics operations by dramatically decreasing the fulfillment costs and overall simplifying the supply chain.

3PL (third-party logistics) services enable you to outsource shipping operations, allowing you to focus on sales channels and growth. They manage freight shipping logistics, customer service, and reverse logistics. By relying on professional 3PL logistics partners, you reduce setup fees, fulfillment fees, and account management fees linked to in-house operations.

Hence, this article explains what a 3PL is, how 3PL shipping works, and what to consider when choosing the right third-party shipping company for your business.

Let’s start with the most important – 3PL logistics meaning!

What Is a 3PL in Shipping

3PL, or third-party shipping, refers to outsourcing your freight services, shipping, and logistics operations to an external provider. So, the 3PL third-party logistics definition includes handling, warehousing, order fulfillment, transportation, and tracking for your freight. Many businesses use 3PL shipping services to reduce operational costs and improve delivery speed.

3PL solutions in logistics also allow you to access professional shipping services without investing in your own fleet or warehouses. For example, 3rd party shipping companies offer 3PL delivery, 3PL shipping tracking, and freight shipping solutions.

Using a third-party shipping company makes your supply chain easier to manage and supports multiple sales channels efficiently.

What Is a 3PL Logistics Company

A 3PL logistics company manages your freight shipping services and logistics operations for you. As mentioned, this includes reverse logistics and handling fulfillment costs, which is everything many businesses lack, especially during a demand spike.

So, outsourcing to a third-party shipping company simplifies 3PL delivery and improves your supply chain efficiency.

In short, that’s the 3rd-party logistics definition. Let’s next learn more about what is 3PL services!

What Do 3PL Companies Do

3PL companies mainly manage the most complex logistics tasks that businesses outsource for efficiency, especially when they lack what it takes to fulfill customers’ demand. To understand exactly how 3PL companies help, here are their duties:

• Freight Shipping: 3PL companies can often get involved in the coordination of the freight shipping services across freight carriers and regions.

• Reverse Logistics: In many cases, the 3PL company will also handle any exchanges and returns, while also handling any damaged products.

There are even more features you can get from a 3PL company, such as establishing a sales channel, in-depth account management, and even assistance with transportation scheduling.

In short, you get complete support with pretty much anything logistics!

How Does Third-Party Logistics Work

A third-party logistics work is achieved by outsourcing your shipping to a specialized provider. The 3PL manages logistics operations while you focus on sales and growth. Here is how it functions in practice:

Transit and Freight

3PL coordinates freight shipping services and freight shipping logistics. They select the carriers, schedule pickups, and optimize routes for cost and speed. You mainly benefit from 3PL shipping solutions without managing fleets yourself.

Tracking and Reporting

A 3PL provides 3PL shipping tracking, performance reports, and analytics. You see 3PL costs, account management fees, and delivery performance, which is a transparency that helps you adjust operations and control your budget.

That’s the 3PL services meaning, so let’s next learn more about exactly how does third party logistics works, based on your specific needs.

What Are the Three Types of 3PL Companies

The 3PL companies vary in services and capabilities, but most fall into three main categories. So, understanding these types will tremendously help you in choosing the right partner for your supply chain and logistics operations.

Let’s break down the 3 general types, even though there are many more:

Transportation 3PL

These 3rd party shipping companies focus on moving goods from one location to another. They handle freight shipping services, carrier selection, and delivery scheduling. Transportation 3PLs usually do not manage returns or reverse logistics, but they optimize shipping rates and the 3PL delivery for efficiency. Examples include freight carriers, courier services, and trucking providers.

Space Management 3PL

Space management 3PLs provide fulfillment center storage and warehouse solutions. They also handle inventory management, order fulfillment, and restocking.

These providers may also offer 3PL shipping tracking and freight shipping logistics, keeping the supply chain organized while reducing fulfillment fees.

Full-Service 3PL Company

Full-service 3PLs manage 3PL shipping solutions end-to-end. They cover 3PL delivery, reverse logistics, and customer service. Some also offer analytics, technology solutions, and integration with your sales channels. This type reduces setup fees, fulfillment costs, and overall 3PL costs while providing complete logistics support.

3PL Shipping Benefits for Your Business

As mentioned, with a 3PL shipping, you can instantly outsource your logistics completely and dramatically improve your supply chain. A reliable 3PL provider helps your business scale faster while maintaining consistent delivery quality.

Here are the main advantages for businesses working with a 3PL provider:

Cost Savings

Outsourcing to a third-party shipping company reduces overhead costs for warehouses, labor, and transport. You avoid large setup fees and benefit from lower shipping rates through bulk carrier contracts.

Better Logistics

3PLs manage your freight shipping logistics and order fulfillment with precision. Their systems improve delivery times and reduce fulfillment fees caused by inefficiencies. This ultimately leads to higher customer satisfaction and hopefully retention.

High Fulfillment

A 3PL logistics company adjusts capacity as your order volume changes, and this flexibility helps during seasonal peaks without raising long-term 3PL costs. Also, 3PL companies are flexible and can adjust to unique requirements and needs.

High Expertise

3PL providers specialize in freight shipping services and 3PL shipping solutions, which means that they can help you out with anything beyond your understanding. Their knowledge ensures compliance, speed, and quality across your logistics network.

Advanced Technology

Many 3PL shipping companies use real-time 3PL shipping tracking and data analytics. This improves visibility, helping you plan stock and shipping decisions accurately. In many cases, this is absolutely crucial for businesses with high customer demand.

Better Experience

Fast, accurate 3PL delivery improves customer service and clients’ satisfaction. When all of your orders have on-time shipping, this strengthens trust and drives repeat sales across your sales channels, setting you up for long-term success.

How Much Does 3PL Shipping Cost

3PL shipping costs vary by provider, service type, and shipment volume!

Most companies use flexible pricing models based on your business size and order flow. Key expenses include setup fees, fulfillment fees, account management fees, and shipping rates. Some providers offer flat-rate or charge-based pricing structures depending on the services.

Here’s an easy-to-scan breakdown:

Understanding these costs helps you compare 3PL shipping companies and choose a provider that matches your budget and logistics needs.

What to Consider When Choosing a 3PL Provider

Now that we’ve learned what does 3PL mean in shipping, you need to assess which provider aligns with your business goals. So, look at their experience in freight shipping services and logistics operations, while also reviewing their pricing models, including setup fees, fulfillment fees, and account management fees.

Additionally, check if they offer transparent 3PL shipping rates, real-time 3PL shipping tracking, and responsive customer service. Evaluate their technology, warehouse network, and support for multiple sales channels. A strong 3PL logistics company should provide reliable shipping solutions, consistent order fulfillment, and measurable cost savings across your supply chain.

We wish you the best of luck!