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3PL Service & How Third Party Logistics Companies Work

3PL Service provider

3PL, which is the acronym for third-party logistics, is a supply chain management system, where the parts of a business are distributed and services are fulfilled. The ultimate focus of a 3PL company is to make the most of how shipments are handled by a company. They are very much skilled and experienced in the fields of shipping,warehousing and fulfillment.

Initially, around five decades earlier, the businesses consisted of only two parties, one who would sell the products or services, and the other was the consumer, who would buy the same in exchange of money. However, with the passage of time, more and more sellers started coming to the market, but with a lack of logistics to carry forward or expand their business activities.

This gave rise to third-party logistics. Logistics primarily refers to a third person, in between the real seller and the buyer, who is equipped with the necessities to transfer the goods in the ordinary course of business but does not take part in the actual process of transferring. Nor is 3pl service provider the owner of the product or service. It is like an intermediary doing the needful.

Today a 3rd party logistic service or 3PL company is an important intermediary between the seller and buyer. All the things that happen between buying and delivery of the product are handled by third party companies. Be it logistics, transportation, warehousing or delivery of the product there are third party vendors who handle all these important parts of the business.

Today no one can imagine business happening without third part vendors. Also these third party vendors allow the company to concentrate on its core competency and thus maximize profits and cut costs by outsourcing the major part of warehousing, transportation and delivery to Third Party Logistics Company

Also this is a big money saver as these third party companies are experts in their field and carry out the most daunting tasks with enormous ease. They specialize in logistics, warehousing and transportation and thus are able to do it more efficiently and effectively and thus save money for their client and also generate revenue for themselves from the fee they charge their clients.

By going with these third part companies you will get the benefits of economies of scale and also you will be able to delight the customer by providing him the product safely and securely and in time without having to spend a lot of money on the transportation and warehousing.

Today is the day and age of specialization and all business focus on their core competency and outsource all the other parts of the business to third party vendor and this ensures that the business focuses on its core business and makes the maximum profit from it by effective and efficient allocation of resources.

However, they are legally bound to perform and fulfill the required fulfillment duties of an online store. They do not own any inventory, but they are working with full dedication since their inception. In addition, the market of third-party logistics has been exploding.

Third Party Logistics Providers

Third Party Logistics Providers or 3PL are those who deal with various logistic needs for business organizations. This helps businesses to pay attention on their key objectives and leave aside the worries of transportation and distribution. The Third party logistics providers would be taking charge of the warehouse and keep a close watch on logistic operations. In order to fulfill the wide ranging requirements and demands of consumers the 3PLs have to understand the market trends. For every business it has to draw out specific plans and adapt it accordingly to earn profits. They need to know well about the most important necessities of delivery services related to logistics.

The 3PL providers are outsourced, to supervise or run all or either some of the operations of transportation and logistics of a business. They are responsible to carry out warehousing, freight management and transportation effectively. The efficiency of supply chain can also be improved with the management and coordination of a 3PL. During the recent times, outsourcing of 3PL services has grown more than 60% among shippers. A Third Party Logistics provider has wide range functions, which consist of –

  • Harmonizing Committed and Secured Transportation
  • Inventory Management
  • Managing Logistics
  • Discussions and Review of Freight
  • Tracing & Tracking Shipments
  • Reverse Logistics
  • Value Added Services

The 3PL service providers are skilled in organizing every feature of delivering freight to the consumers from distributors and manufacturers. Generally, these logistic providers have their own freight carrier which is a way to reduce cost and liability of the manufacturer. Sometimes 3PLs run the fleet of the customers to bring down the operating costs.

Third Party Logistics Advantages and Disadvantages

Certainly there are superior explanations to select a 3PL provider to look over and manage all your logistics concerns. On the contrary you would face numerous influential opinions against 3PL. But, the correct preference always remains on the needs of your business.

Advantages of 3PLs

There are many beneficial factors that a business can receive as they decide to opt for Third party logistics providers –

  • A 3PL must have sound knowledge regarding transport regulations, both nationally as well as internationally. It helps businesses to analyze the markets and then step into them.
  • These days 3PLs are able help out in resolving logistical matters such as shipment missing, fees of brokerage, deficient tracking, and irregular delivery timing.
  • 3PL providers assist in shipping supplies not only in a country but also everywhere around the world. To support fulfillment of orders, in lots of domestic and foreign markets, they create the facility of warehousing.
  • In comparison to renting or buying warehouse, as per market location, it is rather inexpensive to outsource or engage a 3PL provider.
  • The 3PL provider is competent to bring down the costs of transportation.
  • 3PL is able to handle fulfillment from several markets.
  • It is able to deliver products of customer into their hands in a faster way.
  • 3PLs apply modern software to keep track of ongoing business, for which they are assigned.

Disadvantages of 3PLs

  • Losing hold over the shipping operations is a key drawback of applying 3PL. The impact of business upon consumers and their satisfaction both remains in the control of a third party.
  • The internal team of logistics of a business loses most of the significant understanding of the market. With the loss of such institutional knowledge initiating the functions of logistics once again might get problematic.
  • A study has revealed that sometimes troubles occur among suppliers and buyers due to poor communication. This often leads to operation failures.

How Third Party Logistics Companies Work

A 3pl service is generally carried out in 4 phases. The phases are procurement, transportation, distribution and lastly growth. This helps the small businesses as well as the start-ups to experience expertise in every step and thereby growing their respective businesses. The following discusses each point in details. Read further to find out.


This is the first step and it involves collecting the raw materials with which you are likely to manufacture the products in your business. You may manufacture at your own workshop or hand it over to a contractor. Irrespective of the way you choose to come under this category.

A 3pl service provider works to give you the best designs and engineering facilities so that your goods ar4e manufactured in the most effective way and stand out in the market. They also provide the sourcing of raw materials, production facilities, as well as out-sourcing of finished goods. Eventually, they ensure that the orders are delivered to the customer without any hassles.

They are good at providing cost-effective plans so that you get the manufactured products at a comparatively cheaper rate and then sell them for maximizing profit. Therefore, based on the services you wish to take under the procurement category from a 3pl service provider, you will be charged accordingly. The fess is usually charged with respect to the quality and quality of goods manufactured.


Third-party logistics service providers are well with transportation facilities too. They can easily trim the requirements when you are importing goods from a domestic manufacturer or an international one. They can meet your scheduled pickups or drop-offs and minimizes the paperwork easily, and that too, in a cost-effective way. Operating with a 3PL company lets you curtail the expenses and increase your process of fulfillment.

The 3PL companies usually cover the following three services under transportation, namely domestic freights, import/export, and overseas shipping.

In the freight services, the 3pl service provider helps a business with all the pick-ups and deliveries of the products. Simultaneously, they also look after the paperwork that is involved in the process. Secondly, for import/export services, the 3pL service companies make sure that there are no extra costs incurred by the business and there is timely delivery of the required materials. Lastly, for the overseas shipping, the third party logistics service providers ensure the economical rates of transfer and shipment. In addition, they also check in for the feasible check-in timings of the transoceanic ships.

growing fast in the 3pl service


The sector of distribution is growing fast in the 3pl service, owing to the fact they are delivering services fast and at an economized rate. By using the services of 3PL you can gain the agility to arrange and balance the model of distribution as demands shift in business. They deliver service to both business-to-business and business to consumers end. Additionally, they also cover a wide range of activities, such as warehousing, inventory, order packing, etc. Below mentioned are the activities the 3PL companies are engaged in for easy redressal of logistics services.

  • Product packing is the prime concern of any business, and the 3PL service providers make it easier for the business to deal with it.
  • Parcel shipping for B2C sales is another important arena that is effectively handled by the 3pl service provider.
  • Order processing and packing, both are guaranteed by the third party logistics service companies.
  • The logistics service companies are also great in handling the returns too. Many a time, they do it for free too.
  • Warehousing and inventory are also taken care of by the 3PL service companies. They receive and store products based on the requirements, and make sure no damage is caused to the same.


The Third-party logistics service providers also aid in growing your business horizons. Apart from handling all the above-mentioned spheres of product for a business, the logistics service companies also help in promoting your business. They help their clients with sales and marketing efforts too.

The points below discuss the various ways by which they help in the growth of your business.

  • They develop the brand of our business by promoting the logo design, and with the brand messaging as well as the brand packaging.
  • Secondly, they also connect with big brands such as Amazon, Walmart, eBay and fill them with your products for effective advertisement. They may also connect to various social sites too.
  • In addition, the 3pl service provider also sets up online stores for you to showcase your products and consequently, manage the same thereafter.

Finally, it can be said that the logistics service providers are a very effective medium in bridging the manufacturers and the consumers. They have broken the traditional buying and selling customs, by bringing the entire sales cycle under their ambit.

Therefore, if you are searching for a 3pl service then it is time that you find out your needs and make your search accordingly. The best part is that they charge minimal fees for doing so, and eventually you can see your business flourish in this competitive market. Integrating with a well-organized 3PL Company, besides getting swamped with business orders you can also earn joyous customers. It is what matters most for a business to flourish.

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If you’re interested to know more or request a quote, our experts can help and answer your questions and find the right solution! Please contact us today.


Question 1. What types of deliveries can you do?

Answer. DlXpress provides ground transportation via any sized truck and can coordinate air freight delivery and pick-up services.

• DlXpress handles all types of shipments:
• Truckload
• Less-than-Truckload
• Over Dimensional
• Airfreight
• Ocean.

Question 2. What industries benefit from 3PL services?

Answer. Most companies that have daily needs, or infrequent needs, for the delivery of their products can benefit from third party logistics.

Question 3. What industries Benefit from your 3pl services?

Answer. We routinely work with large and small manufacturers, suppliers and distributors in various industries, some of them are as follows:

• Automotive
• Food and Drink
• Plastic & Resin
• E-Commerce and Retail
• Pharmaceutical and Healthcare
• Trade Show Transportation Services
• Produce and Industrial Supplies
• Aerospace and Defense industry
• Specialty and Sensitive Deliveries

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