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Third Party Logistics (3PL) Definition

Posted in Logistics Parties - 4 Feb 2019, 8:47 AM

A third-party logistics company is working with multiple organizations and specialized in performing various jobs from receiving inventory to shipping. Unlike the second party logistics service provider that is focusing on provider carriers, the entity of third party logistics has more jobs to do. Put it differently, not only this type of logistics company pays particular attention to providing transportation of goods delivered from consignor to consignee, but it also comes with supplementary services regarding the supply chain. The details are well clarified below.   

Basic Definition of Third-Party Logistics Service Provider

A third-party logistics provider (abbreviated as 3PL) generally establishes mutual cooperation with shipping companies. The combined effort is carried out so that the logistics management, as well as the service distribution, can be fully implemented. It usually goes on behalf of another association.

You need to know that the third-party logistics company plays a significant role of a liaison, linking the hiring company and shippers. Alternatively stated, it becomes a representative of the company hiring a 3PL. In the global scheme, plenty of 3PL companies have worked with a multiplicity of business models.

Varied Common Services Third Party Logistics Provider Manages

As clarified previously, 3PL companies offer additional services. They commonly include management of supply chain, terminal operations, warehousing, and not to mention the customs brokerage. It is found to be versatile since it also handles track and trace services, stock management, and transaction of some clients.

A Set of Actions Performed by the 3PL Companies

It is not a secret that the third-party logistics service providers come with multifarious actions. When receiving inventory is the focal point, the company is given a mandatory task to let the inventory in-house, received and supplied. It also has another responsibility in keeping the label and naming it.

The 3PL companies take their job in checking out the order number and identifying the customers. In the picking process, the professional service provider collects an order from the master carton and put it in an envelope with information regarding the recipient. Besides, several 3PL providers have a go with custom packaging options.

What is the key benefit of the third-party logistics? The chance of being centralized on the activities is way bigger. When it comes to cost management, it’s cheaper than others. In addition to that, the quality of the services remains high. In conclusion, third party logistics company provides a range of responsibilities compared to second party logistics service provider. From storing inventory to picking and packing, the jobs are handled professionally.

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