Running a business today means dealing with complex supply chains, fast-moving technology, and global shipping demands. That’s where 3PL (third-party logistics) companies come in. They take the hassle out of warehousing, shipping, and distribution, so businesses can focus on what they do best. 

Whether you’re a growing e-commerce brand or a large manufacturer, a good 3PL partner helps keep your operations running smoothly and efficiently.

WHAT DOES 3PL MEAN IN SUPPLY CHAIN MANAGEMENT?

3PL stands for third-party logistics. Put simply, 3PL refers to when companies outsource logistics operations to a third party. This can mean everything from transportation and fulfilment, to warehousing and customer care. 

Find out more about what 3PL means with our complete guide to Third-Party Logistics.

Businesses of all shapes and sizes from a multitude of industries use 3PL logistics to outsource operations - including nearly 80% of Fortune 500 companies. 

From e-commerce, manufacturing, hospitality and automotive businesses, 3PL services can help with efficiency gains and cost savings in almost every industry.

A well-known example of a company using 3PL services is British airline Virgin Atlantic. Their partnership with SEKO Logistics includes a 250,000 square-foot centralised warehouse in the UK, managed by a dedicated team to handle the movement of alcohol, onboard consumables and equipment. You can read more about how SEKO supports Virgin Atlantic in this case study.

WHAT DO 3PL COMPANIES DO? 

3PL companies generally help businesses to manage their transportation, warehousing, and fulfillment needs. Here are the key services they offer:

Transportation: This involves the movement of goods from one location to another. 3PLs often have a vast network of transportation solutions, including trucks, ships, airplanes, and trains to ensure timely and safe delivery.

Warehousing: Beyond just storage, modern warehousing provided by 3PLs includes inventory management, order fulfillment, and even packaging. These facilities are equipped with the latest technology to track and manage products efficiently.

Distribution: 3PLs manage the distribution of products, ensuring they reach the right place at the right time, whether it's a retail store, another business, or directly to the consumer.

Value-added Services: Many 3PLs offer services beyond the basics, such as cross-docking, labelling, product repairs, and customs brokerage.

THE IMPORTANCE OF A 3PL IN SUPPLY CHAIN MANAGEMENT

If manufacturers had to handle every single aspect of getting their products to consumers, the costs and logistical challenges would be monumental. 3PLs enable companies to leverage existing expertise, networks and infrastructure, ensuring products move seamlessly from production facilities to store shelves and ultimately into consumers' hands. 

By outsourcing these challenges, companies can spend less, scale faster, and maintain or even improve customer satisfaction.

HOW HAS 3PL EVOLVED?

Historically, businesses managed their logistics in-house. However, as the global market expanded and operations became more intricate, the need for specialized expertise grew. Initially, the role of 3PLs was limited to certain tasks, but over time, as businesses recognized the value of outsourcing complex logistics operations, it  expanded.

Today, 3PLs are more than just service providers; they are partners in a company's success. They bring expertise, technology, and a network that many businesses cannot develop on their own. By handling the complexities of the supply chain, they allow businesses to focus on their core competencies,  such as product development, marketing, or sales.

In essence, a 3PL company acts as a bridge, connecting businesses to their customers through logistics services. Their role is not just about moving goods; it's about optimizing the entire supply chain process to ensure efficiency, cost-effectiveness, and customer satisfaction.

WHAT ARE THE ADVANTAGES OF PARTNERING WITH A 3PL COMPANY?

Expertise: 3PLs bring in-depth knowledge of regulations, shipping routes, and warehousing best practices.

Cost Savings: By consolidating shipments and optimizing routes, 3PLs can significantly reduce transportation costs.

Flexibility: Whether it's a sudden spike in demand or expanding to new markets, 3PLs can scale operations accordingly.

HOW CAN 3PL COMPANIES HELP BUSINESSES RUN MORE EFFICIENTLY?

3PL companies  play a pivotal role in enhancing the operational efficiency of businesses. One of the primary ways they do this is by taking on the intricate and often cumbersome tasks of managing a company's logistics operations. By outsourcing these functions to a specialized 3PL provider, businesses can spend their focus elsewhere. 

Efficiency in logistics is not just about moving goods from point A to point B; it's about optimizing the entire process. 3PLs bring expertise and technology to the table. They have systems in place to manage inventory, streamline warehousing, optimize transportation routes, and ensure timely deliveries. This means reduced lead times, fewer errors, and more satisfied customers.

Furthermore, 3PLs have vast networks that individual businesses might not have access to. This network allows for bulk shipping discounts, better warehousing rates, and quicker access to various markets. By leveraging these networks, businesses can expand their reach without the overheads of setting up their own logistics infrastructure.

By partnering with a 3PL, businesses can transform their logistics from a potential headache into a competitive advantage. The expertise, technology, and network that a 3PL provides ensure that goods flow seamlessly, efficiently, and cost-effectively through the supply chain.

CAN A 3PL MAKE A BUSINESS MORE SUSTAINABLE AND PROFITABLE?

Absolutely, a 3PL can be a catalyst for both sustainability and profitability in a business. On the sustainability front, many 3PLs are now adopting green practices. They are investing in fuel-efficient vehicles, optimizing routes to reduce carbon footprints, and implementing sustainable warehousing practices. By partnering with such a 3PL, businesses can significantly reduce their environmental impact. This not only contributes to a healthier planet but also resonates with eco-conscious consumers, enhancing a company's brand image.

Profitability, on the other hand, is directly linked to efficiency in logistics. A reliable 3PL ensures that goods are stored, handled, and transported in the most cost-effective manner. Reduced wastage, optimized storage, bulk shipping discounts, and efficient transportation all contribute to cost savings. These savings can then be passed on to consumers in the form of competitive pricing or reinvested into the business for growth and expansion.

Moreover, a 3PL provides businesses with scalability. Whether it's peak season demand or expansion into new markets, a 3PL can quickly scale operations to meet the requirements. This flexibility ensures that businesses can seize opportunities without being bogged down by logistical challenges.

A 3PL does more than just manage logistics; it adds value to the entire business operation. By driving sustainability and efficiency, a 3PL can significantly enhance a company's profitability and brand reputation in the market. Find out more about what value a 3PL can add to your operation in our Complete Guide to Third-Party Logistics (3PL).

WHAT SETS SEKO APART:

With over 150 offices in over 60 countries, we make the impossible possible. We like to think of ourselves as the 'one stop' logistics partner you've always needed - like a powerful extension of your existing team. 

  • Hands-on Service: Every client is unique, and SEKO's approach is tailored to meet individual needs.

  • Personal Relationships: At SEKO, business is personal. Building and maintaining strong client relationships is at the heart of everything we do.

  • Innovative IT Solutions: In a digital age, SEKO leads the industry with cutting-edge IT solutions, ensuring clients have real-time visibility into their supply chains.

SEKO is a name businesses trust. We’re known for our reliability, expertise, and commitment to making logistics simple and stress-free for our partners. Offering a comprehensive suite of services, including ground, air, and ocean freight, SEKO is a trusted partner to businesses worldwide. Reach out and see how our expertise in logistics can make your business run more efficiently.