Third Party Logistics (3PL) Vs In-house What’s the Right Path For Your Business

Logistics refers to the management of goods flowing between the origin and consumption point in order to meet specific requirements. This process can either break or make e-commerce businesses. For boxes to be correctly delivered to customers on time, exceptional logistic skills are required to meet customers’ expectations.


Third-Party Logistics Company

Quite a number of start-ups opt for the outsourcing option to fulfill their order through a 3PL company. A third-party company that offers these services manages all the functions in the supply chain on behalf of the consumer. Under the Third-party model, three parties must be involved for a product to reach a customer, i.e., the customer, the manufacturer, and the Third-party firm.

The providers of Third-party firm mainly specialize in warehousing, operation, and transportation services that can be customized and scaled based on the needs of the customers, market conditions and the delivery service, and demand requirements for materials and products. When choosing a third-party provider, it is important to inquire how many locations the firm has to ensure that they can efficiently cover territories with target sales. Also, find out their competitive price, competitors, and area of specialization.

Advantages of a 3PL Firm

Third-party companies have large warehouses with multiple locations from where shipments of products can be done faster. A 3PL allows people to focus on their company’s core competencies and strengths since the handle warehousing, distribution and order fulfillment.

Working with a third-party firm enables customers to scale up or scale down operations as per the volume of an order. Scaling up is useful when a company needs to expand its business into new areas or seasonal and growth periods like the holidays.

Another advantage of a 3PL firm is the availability of accessing a larger resource network that provides fast and high quality as well as volume discounts. The use of a 3PL provider saves on time and the cost of investing in technology, transportation, warehouse storage, and staffing. The 3PL providers are experienced and help companies to cut down on paperwork, audits, and billing. The freight broker from the specialized provider is up to date with the latest technology, software, developments, and techniques in the industry.

Management of In-house Logistics

It is important to ensure that there is enough space to layout paperwork and orders apart from box storage. Setting realistic expectations will guarantee that the customer will be aware of exactly how long it will take for the product to be delivered. Also, customers should be informed if the shipment will be done by a designer or a warehouse. Whenever there is a delay, customers should be updated on the progress. Discounts and dress shipping can also be considered to compensate a screw-up or a customer’s awful shipping experience.

A third-party firm is a great support system for most companies and businesses because it allows them to focus on core competencies. However, it should be a company’s long-term goal to hire specialized company with highly qualified and experienced freight broker to handle their flow of goods from the producer.

Justin Bright – CEO Brighter Logistics

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