Now, we will look into 3PL, that is, 3rd
Party Logistics.
It is obvious that 3PL forms a part of
Logistics and Supply Chain. A business involves basically one who manufactures
and the other one who buys what is manufactured. Only these two parties are fundamental units
for any business and other intermediaries are made possible because of these
two basic pillars of the Business.
Out-sourcing has grown into almost an
integral component to any enterprise. A manufacturer uses another business, or
a party who sells some very important part of the product to the manufacturer
who instead of manufacturing that part of the machine, so to say, buys it from
the other party. In business language, the manufacturer outsources that part of
the machine; that is, he gets that part from outside, he outsources that part
of the machine.
3PL means a company is using the third
party to outsource some elements of the company’s distribution.
Generally 3PL targets some particular
functions that facilitate smooth administration of a business; they are usually
raw materials provision, warehousing and transportation.
Some popular examples of 3PL are
courier, express and parcel services, freight forwarders and transshipment
providers.
The Third Party supplier or service
provider is not directly controlled by either the seller, the first party or by
the buyer, the second party.
There are some types of 3PL providers;
they are Standard 3PL Providers, Service Developer, Customer Adapter, Customer
Developer, Transportation, Forwarder, Warehouse Distribution and Shipper
Management.
Let us see how these types of 3PL serve the businesses.
Standard 3PL Providers: These types of 3PL providers perform the most
basic logistical functions like warehousing, packaging and distribution for
their clients. Their services depend on the requests of their clients.
Service Developer, as the word develop
indicates, these types of 3PL providers offer additional options; they offer
support in IT, in security, in special kind of packaging, and also product
tracking. They in fact ensure that your product is delivered to your customer
in time and in good shape.
We will
look into the other types in our next session.
