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Third Party Logistics | XL Logistics Blog

Understanding Third Party Logistics

Posted on 20. Jun, 2013 by in 3pl

A third party logistics provider also known as 3PL or TPL is a company that specializes in outsourced logistics services. These services can include but is not limited to transportation, warehousing, pick-pack, dispatch, shipment requirements and inventory management. This is carried out from the location where the goods are manufactured or imported until they get to the end user through the supply chain.

3PL gives companies the room to concentrate on their core business activities and allows them flexibility in harmony with the dynamic and changeable economic environment. When there is demand for the goods, 3PL helps with logistics and when there is no demand for goods, manufacturers are able to avoid the costs that might be incurred because of lack of business activities. 3PLs are cost effective to companies and provides companies with economies of scale and this brings about in increased cash flow and profitability.

Third party logistics provider offer services that enable businesses to outsource part or the entire supply chain management operations. This means that businesses can increase or decrease space required for warehousing in accordance to their requirements and this is very cost effective for them. 3PL services have become a vital trend in contemporary logistics and are a much more viable and economically sound alternative for businesses.

Apart from the advantages of economics, 3PL services help businesses avoid the trouble of having to deal with legal and frameworks involved when shipping abroad. With the help of 3PL, the movement of goods is faster and much cheaper. Effective logistics management helps many companies stay competitive while services are improved.

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