Plan, procure, execute, & track transportation for every shipment across your supply chain & logistics operations
A SaaS solution to help grow your business by achieving 100% perfect order execution at high volumes
Increase vehicle capacity utilization and customer promise adherence
Grow your business with omnichannel presence and automated pickups
Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
Reduce freight costs & get end to end visibility across shipments
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According to a research report by Market Research Future (MRFR), the global 3PL market is projected to grow from USD 921.49 billion in 2020 to USD 1,993.72 billion by 2028. This growth is registered at a CAGR of 8.7% during 2021-2028. Considering these statistics, it is evident that the 3PL industry is evolving at an unprecedented rate. The major driving forces behind this include the thriving e-commerce industry, increasing trade activities, and the need to ensure smooth delivery operations. So, what is 3PL? How does it work? Why does a business need to partner with a 3PL company? This blog answers all these questions and is a complete 3PL guide.
3PL or third-party logistics is outsourcing logistics and supply chain operations to a 3PL provider. Depending on the requirement, a business can outsource either partial or complete logistics operations, including inventory management, distribution, and delivery. Such a company ensures the smooth movement of goods from one location to another during the first, middle, and last leg of logistics.
Logistics services a 3PL offers may vary from one to another company. However, some common 3PL services include:
It includes getting inventory, for shipping and order fulfillment, and bringing it to the distribution centers. 3PL may also offer storing and processing inventory before moving it out for the delivery.
Picking and packing service include picking different products ordered by a customer from the warehouse and then packing them into one. Once the product is picked, the 3PL identifies an optimal way to pack and present the product.
Shipping is one of the most complex processes of the order fulfillment process. It is because of the involvement of multiple factors and stakeholders. A 3PL ensures smooth shipping services and improved fulfillment process.
Returns management service includes bringing the delivered product from a customer’s location back to the warehouse. It also incorporates generating shipping labels and updating inventory.
Order fulfillment can be done in two ways: in-house or through a 3PL. In-house fulfillment requires manual planning and manual management of multiple operations. This can lead to inefficiencies and redundancies that, in turn, increase operational costs and might pose a hurdle for scaling the business.
On the other hand, partnering with a 3PL allows the businesses to leverage an already established set of services and operations that is optimized for efficiency and cost savings, etc. A 3PL offers end-to-end logistics management services and allows a business to focus on marketing, growth, and other core business functions.
Now that we have had a detailed overview of 3PL logistics and its importance let us move on to discuss the various benefits it offers.
A third-party logistics partner helps businesses to expand their geographical reach or add more offerings. They do not have to limit their area of operations just because they do not have a warehouse in a particular region.
For example, you are running an online business with serviceability only in your country. Now your business grows or gains popularity, and you start receiving orders from all over the world. How would you ship orders internationally? The answer is with the help of a third-party logistics provider that operates in that country or particular geography.
Customer shopping habits and demands have changed a lot in the past few years. They now want lightning-fast deliveries, multiple buying options, multiple shipping options, real-time tracking, and whatnot. By connecting with multiple 3PL logistics partners and leveraging their exceptional strengths and capabilities, businesses can meet these customer expectations.
Delivery trends have changed; it’s the time for next-day, same-day, express, and time-bound deliveries. It is possible when a business connects with multiple 3PL partners as one 3PL might not be able to serve all these delivery types.
For efficient logistics management and customer satisfaction, it is essential to get a hold of logistics complexities. 3PL logistics providers have the required expertise to understand customers’ expectations and cope with changing logistics trends. They use advanced solutions and smart functionalities for end-to-end logistics management.
A 3PL company has the required resources, technical expertise, and tech solutions to meet the requirements of its clients. Such advanced solutions automate delivery-related tasks to save operational time, improve delivery speed, and boost customer experience while offering real-time tracking to all stakeholders. 3PLs are also able to manage high volumes of orders during sales, festivals, and seasonal rush. Having automated courier management software in place ensures time and cost-efficient deliveries.
Once you outsource your logistics operations, you don’t need to worry about each minute detail of the delivery. 3PLs take care of end-to-end delivery management right from packing to doorstep deliveries. It means you can focus on the other main functions and operations of your business.
3PLs use top-notch technology platforms to streamline and optimize delivery operations and shrink the overall delivery costs. Smart routing cuts down fuel consumption and hence, the fuel costs while ensuring on-time delivery. Automated workflows help save money by fair resource utilization and minimizing redundancies. Besides, 3PLs also prevents a business from investing in setting up dedicated warehouses, hiring resources, and more.
While the core capabilities of all the 3PL logistics service providers stay almost the same, every business has different use cases and logistics requirements. Further, one business might also offer different types of deliveries, like same-day deliveries or 10-minute deliveries, or planned deliveries. Thus, they might need two or more 3PLs for managing all these orders.
To make the 3PL provider selection easier and better for all our readers, we are sharing some key considerations in the following section.
3PL management platforms come up with APIs for hassle-free onboarding of new third-party logistics providers or carriers.
Keeping end customers informed about their orders always works wonders for a business. An intelligent 3PL management platform does this job by sending live milestones updates, via SMS/Email/WhatsApp, to the end customers. These updates can be in your own branding. The platform also ensures that you can track all your deliveries across different 3PLs in real time.
Smart 3PL management platforms automatically allocate the order to a suitable 3PL. For example, if you have received two orders with, one to be delivered within the city and the other to a remote location, then it selects a 3PL partner accordingly. Not just the location, it checks many other parameters, including 3PL performance, cost, type of order, and order value, before assigning delivery to a 3PL.
The platform can be easily integrated into your existing ERP system, and you can connect and communicate with all the third-party logistics partners on a single platform.
With a 3PL management platform implemented in your ERP, you can check all required 3PL metrics, track 3PL partners’ performance, and more.
The platform also helps to look into customer experience and delivery feedback. You can even verify delivery failures and allow customers to raise a complaint.
Shipsy’s smart 3PL management platform helps businesses scale their operations via seamless integrations across all the system components. Businesses can manage, monitor, and track all the 3PLs and their services right from a single unified dashboard and also derive data-driven insights for smart business decisions.
Shipsy automates compliance, digitizes billings and invoicing, and ensures standardization of information across multiple carriers for centralized management of all operations.
With its smart offerings, Shipsy has helped businesses unlock the following:
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The global eCommerce is booming and 3PL Logistics is experiencing the ripples of its growth. Explore various challenges related to 3PL logistics in modern retail & how smart 3PL management rids them.
Explore how smart, scalable, and robust 3PL logistics solutions can help your business make the most of the US $4.23 trillion eCommerce opportunity in this 3PL logistics guide for 2023.
