What is a 3PL warehouse

The concept of a 3PL warehouse might be something you’re not familiar with.

To free up time for other aspects of your business, you might want to consider employing a 3PL warehouse to handle every aspect of your company’s operational logistics, from storage to delivery.

It is common for 3PL warehouses to provide a wide range of services related to supply chain logistics. From transporting to freight, to warehousing and storing stock, to picking and packing orders, forecasting and planning inventory, ordering, fulfilling orders and managing freight delivery.

If you’re trying to figure out whether your company requires a 3PL warehouse then consider the below.

The advantage of a 3PL warehouse

Many benefits may be gained by using a 3PL warehouse. Most importantly, you may devote your time and energy to other elements of your company, such as product development, sales and marketing. Third party outsourcing gives you more time and resources to focus on your core business. The following are a few more benefits:

Warehouse for 3PL
  • Cost savings – Individual shippers do not have the same clout with freight firms that third-party logistics providers have. 3PLs may negotiate volume and order frequency discounts with carriers on behalf of many clients. By outsourcing some or all of your supply chain management to a 3PL warehouse, you can free up capital that can be put to better use elsewhere in your company.
  • Scale – Demand for the products and services of the majority of companies fluctuates across each year. Using a third-party logistics provider helps you to more efficiently manage peaks and troughs without having to overcapitalise on space you don’t need.
  • Fast delivery – If you don’t meet customers’ expectations, you’re going to lose out on business. Because of the 3PL’s extensive distribution network, you can provide quick delivery no matter where the item is being sent to. With a worldwide 3PL warehouse solution, you don’t even have to commit to large expenditures like your own warehouse space or people in order to test the waters in new areas.
  • Minimise risk: For a variety of reasons, shipping delays happen. A third-party logistics provider must ensure that your purchases are fulfilled as promptly as possible in the event of unexpected events. In the case of damage or loss, you’ll also be covered.
  • Expertise – Logistics is complicated. It’s best to outsource your logistics to a business that specialises in them while you’re just getting started. Your clients will thank you if you outsource your fulfilment, shipping, and storage needs.
  • Help navigating international shipping. A third-party logistics services operator is able to handle the paperwork, customs, tariffs, and other difficulties that may arise at the border, which might cause delays and increase your shipping expenses if not handled properly. In addition, you don’t have to spend hours attempting to figure out the intricacies of other nations’ tax laws.
  • Reduce expenses. If you don’t have to maintain your own warehouse and personnel, you may save a lot of money. Companies that provide accurate inventory forecasting can also help you reduce inventory holding expenses and optimise your inventory levels.

What are the drawbacks of utilising a third-party logistics provider?

However, 3PLs aren’t for everyone. Here are some disadvantages to think about.

  • Lack of control over the delivery – When you use a third-party shipping service, you may face difficulties if there are delays or issues with a customer’s item being sent. The consumer will turn to you, not your provider for the answer.
  • A larger initial outlay. On the other hand, even if a third-party provider may pay for itself in the long term, the initial expenditure can still be a significant amount of money.
  • Greater separation between you and the product can cause issues with quality control.