Today, many organizations do nothave sufficient resources to carry out the storage and distribution of alltheir merchandise. In this situation, a good solution is to outsource logistics and trust 3PL Services. According to the Logistics study, 89% of companies with a 3PL Logistics say it has helped them improve service and thus satisfy your end customers.
Today, we will analyze thepeculiarities of 3PL Services, the advantages and disadvantages of working with3PL Companies and why the importance of an efficient warehouse management system is important.
What is 3PL Logistics?
3PL logistics (Third PartyLogistics) or outsourced logistics refers to those services that a companyhires a supplier to carry out its logistics and storage, order preparation, or trucking.
In this way, the 3PL serviceprovider becomes responsible for managing its products and delivering them tothe final recipient, acting as an intermediary between the company and its customers.
The meaning of 1PL, 2PL, 3PL, 4PL, 5PL.
Logistics operators are classifiedaccording to the logistics tasks they perform in the company. For itsclassification, the term Party Logistics or PL (whose meaning is "logistics providers") is used and is accompanied by a number that denotes the services offered:
· 1PL (FirstParty Logistics): transportation is outsourced through agencies thattake care of the fleets and drivers necessary to transport the merchandise.Companies maintain control of their warehouses.
· 2PL (SecondParty Logistics): in addition to transport, the logistics operator isalso responsible for warehousing tasks. However, management is still on theside of the contracting company, which is the one that organizes the fleet and material flows.
· 3PL (ThirdParty Logistics): logistics operators are responsible for transport andstorage and, in turn, for the management and organization of both activities.
· 4PL (FourthParty Logistics): they are logistics operators who act as consultantsand auditors of the 3PLs, to validate, optimize and improving the activity.They do not have a logistics infrastructure. They only advise.
· 5PL (FifthParty Logistics): they carry out a total integration of the 3PL andthe 4PL services, thanks to their size and experience.
What type of logistics provider do I need?
The answer varies depending on myability to internalize logistics sustainably. In other words, a small businessis more likely to require a 5PL provider. At the same time, a large company usually opts for a 1PL provider, as it has sufficient resources to manage its warehouses.
Differences between 3PL and 4PL
The main difference between a 3PLand 4PL operator lies in the physical resources that each of them has. 3PL Serviceshave a transport fleet and storage space, while 4PL logistics operators only act as managers and logistics activities. In other words, 3PL logistics provide the physical resources and 4PLs the experience and knowledge to optimize the supply chain. To achieve this, the 4PL operator works with a network of 3PL companies to assign the tasks based on the client's needs and the profile of each operator.
Advantages of working with 3PL Companies
· Working with 3PL Companies means not having to bearthe cost of land, structure or personnel.
· In the short term, it is economically advantageous.
· 3PL services usually have a warehousing centrenetwork.
· 3PL logistics allow merchandise to be brought closerto the end customer and thus deliver orders faster.
· 3PL companies, when dealing with different customersand handling a high volume of merchandise, have very competitive shippingrates.
