The complexity and time spent in managing logistics in a business increases with the growth of that business. This is where Third-Party Logistics (3PL) service providers come in handy. They are generally the ones that take care of the businesses' supply chain operations such as warehousing, inventory management, order fulfillment, and transportation, which then allows those businesses to focus more on their core operations.

3PLs are basically turning in for many businesses so that they can improve their efficiencies and provide savings on their budget to expand their reach without having to invest on potentially costly infrastructure. Outsourcing logistics comes with a cost, however: it gives away some degree of control, relies more on external providers, and in some cases, endures service-related problems.

Next, we examine the benefits as well as the idsadvantages of working with a 3PL provider, allowing you to come to an informed conclusion.

What is 3PL?

Third-party logistics, or 3PL, refers to a situation where a firm will outsource its warehousing, fulfilment, and shipping to a third-party provider. Basically, the 3PL is in charge of any kind of storage and shipping, while you can concentrate on developing your business. 

Advantages of Using 3PL

✅ Saves Time & Efforts – No hassle of packing orders and organising couriers, a 3PL does it all for you.

✅ Lesser Shipping Costs – 3PL providers have bulk shipping deals which can cut costs for the company. ✅ Scalability – As the company expands, the 3PL can handle the increase in order volumes while the company needs not hire extra staff or warehouse space.

✅ Quicker Deliveries – Since 3PLs have warehouses in strategic locations, quicker shipping can be provided to customers.

✅ Better Stock Control – Automation minimizes mistakes and stock-outs with real-time stock updates.

Cons of Using 3PL

3PLs take control over fulfilment away from the sellers. Ultimately, the 3PL has to ensure that your orders are being processed correctly and efficiently. 

The costs can become intense. Although utilizing a 3PL may lower costs in some areas, storage, picking, and packing fees can add up. 

Branding will suffer. Some 3PLs offer custom packaging, while others do not, leaving little room for the outward appearance of your brand to be shaped by you. 

Is 3PL Right for Your Business?

Great candidates for 3PLs are:

You want to focus on growing your business and spend too much time on logistics.

Your order volumes are increasing, and in-house fulfilment is becoming a challenge.

Faster and more reliable shipping is what your customers demand.

However, if full control over inventory and fulfilment is important to you or if you're just getting started with minimum orders, doing it in-house could still be an option.

Final Thoughts

So, is it worth hiring a 3PL? For a lot of up-and-coming companies, logistics outsourcing increases saving time, saving money, and improving customer satisfaction. However, the pros and cons must be weighed according to the needs of your business. Are you thinking of hiring a 3PL? Evaluate the providers and see who fits best in your operation!