A 3rd party logistics company streamlines, consolidates and outsources elements of the logistics process.
3rd party logistics companies or (3PLs) integrate one or more of the logistics and supply chain management process. A 3rd party logistics company may also outsource functions like warehousing, fulfillment, and distribution to outside businesses. Standard third party logistics 3PL companies integrate one or more of the following basic logistics services:
- Transportation or Freight Management
- Public or Contract Warehousing
- Distribution Management
- Freight Consolidation
In its broadest form 3PL applies to any service contract that involves the storing or shipping of a commodity. A 3rd party logistics company may only offer a single service, like transportation, warehouse storage or inventory management. However, it may also offer a system-wide bundling of services and management of a client’s entire supply chain. Many 3rd party logistics companies integrate operations. Warehousing and transportation services are all tailored to a client’s needs.
A 3rd party logistics company like Full Tilt Logistics benefits your business by bundling services and streamlining logistics processes. This allows you to focus more on what matters to you, like sales, marketing, and product development. Fulfillment, warehouses in Reno NV, and shipping all come with major challenges. Handing this task to experts can make a difference in your business processes.
Various Types of Third Party Logistics Companies:
Transportation Based or Standard 3PL Companies
Within the 3PL market, there are various 3PL service providers. Each offers services that include physical transportation, but they may also offer other logistics offerings. These 3PLs are sometimes “leveraged” This means that they use another firm’s transportation assets. Non-leveraged 3PLs use assets that belong solely to them.
Warehouse and Distribution Based 3PL Companies
Warehousing can involve order fulfillment with full-service picking, packing, and shipping of a client’s inventory. Warehouses in Reno NV and distribution based third-party logistics services store your products until an order is received. The company then picks the items from the stock, packages them and then ships them to the designated business or customer.
When it comes to using warehouses in Reno NV, not having to maintain your own space and staff can result in huge cost savings. A more advanced 3rd party logistics company also provides inventory forecasting that can further optimize your inventory levels and save you money.
Forwarder Based 3PL Companies
Forwarding involves directing a shipment of palletized freight between the initial shipper and the final buyer or consignee. Freight forwarding companies are frequently non-asset owners or independent middlemen who arrange everything from the warehousing of a company’s products to the shipping of their goods to various locations. Freight forwarders may also take care of important shipping-related paperwork, expedite border crossings, track shipments, and keep their clients informed about the status of their products throughout the transportation process.
Shipper and Management Based 3PL Companies
These companies focus on the management of the shipping process from start to finish. They provide technology such as transportation management systems and integrated freight management services to eliminate heavy process and cumbersome features throughout the claims and accounting process. These providers also manage carrier relations for ongoing rate maintenance and negotiation, while giving information, such as freight data and matrix reports for better visibility and control on future logistics outcomes.
Financial Based 3PL Companies
Financially based 3PLs provide freight payment and auditing, cost accounting and control, and tools for monitoring, booking, tracking, tracing, and managing of inventory.
Information-based firms 3PL Companies
These are Internet-based, business-to-business, 3Pl companies that leverage electronic markets for transportation and logistics services.
Outsourcing in a 3rd party logistics company:
Not all third-party logistics services outsource in the same way. Each 3PL maintains different relationships with their client’s when it comes to outsourcing, but this is a 3PL’s greatest asset. Some 3PLs leave certain products or operating steps in a client’s logistics system untouched. This is often because the client’s in-house logistics are more efficient or cheaper.
The most important feature of a 3PL is that is adjusted to a client’s needs. This fit is more important than the pure cost savings as it allows for greater flexibility. Clients’ needs continually change, so a 3rd party logistics company needs must remain capable of a variety of circumstances like rising and fluctuating shipping costs, natural disasters, and the price of fuel.
What are the differences between a 1PL, 2PL, 3PL and 4PL logistics company?
- First Party Logistics Companies (1PL) provide one particular service in a specific geographic area. These shippers typically specialize in moving certain goods or providing certain shipping methods.
- Second Party Logistics Companies (2PL) provide specialized logistics services to a larger (often national) geographical area. 2PL’s frequently provide their own internal and external logistics resources. This includes trucks, forklifts, and warehouses in Reno NV for transport, handling of cargo and warehouse management activities. 2PLs have become increasingly effective for companies who have begun to outsource their logistics activities and focus on their own core companies. A 3PL provider frequently integrates the customs system, this is another difference between a second party logistics provider and a third-party logistics company.
- Third Party Logistics Companies (3PL), like Full Tilt, integrate systems. A 2PL works on call whereas a 3PL often works from a longstanding contract and is informed in advance about upcoming shipments. A 2PL normally only provides standardized services, whereas a 3PL is customized and tailored to a client’s specific needs. A 3PL provider’s core competence is in operative logistics, whereas a 4PL specializes in allocative functions of the supply chain.
- Fourth and Fifth Party Logistics Companies (4PL and 5PL) don’t own any of their transportation assets or warehouse facilities but offer supply chain management and system oriented consulting. These non-assets based providers consist of teams of industry experts who fill a role similar to freight agents or brokers while maintaining a fair degree of “hands-on” involvement throughout the transportation of products. Advancements in technology have allowed for the rise of these non-asset logistics providers.
Connect with Full Tilt Logistics
Streamlining, consolidating and outsourcing your logistics processes can result in huge long term financial savings and better overall client service. Connect with Full Tilt Logistics and learn what a dedicated 3PL company can do for your supply chain visibility and overall shipping needs across the united states. We are always happy to answer any and all shipping and logistics related questions and provide you with the best customer service!
