The 3pl (third Party Logistics) are the services that a supplier offers to a company to carry out its logistics. What do these services consist of? Basically they are the functions related to storage, stock management, pick and pack and shipment tracking. So if a company hires another 3pl company (but also known as “outsourced logistics” or “third party logistics”) to take care of your logistics, it will take care of optimizing the management of the supply chain, that is, warehouses, transport, etc. and thus, said company will not have to invest in these resources, therefore, it will save.
Between you and me, if a business hires a 3pl service, the owners can calmly go to the beach, the mountains or, if they prefer, stay at home watching Netflix while an external company ensures that their product reaches the customer .
Clearly, they will not do anything related to shipments, storage and tracking of packages. One less headache.In addition, the 3pl agency becomes an intermediary between the company that sells and the clients. Why? Because it is responsible for ensuring that the product sold by the company reaches the customer who buys it without any problem. But before talking about the advantages of hiring a 3pl service, let’s see other types of pl that exist.
Types of Logistics Operators PL
Logistics Operator PL1
It is a company or an individual that does NOT hire third parties to manage its logistics. He’s made his bed, so he can lie in it This happens when the business is small and they don’t need help or when the business is huge and they have so many resources and so much income that they don’t care about managing their logistics because they have too many people and money. ¡Be careful! PL1 also refers to logistics providers who take care of transportation, thus buying and maintaining vehicles and managing drivers.
Logistics Operator PL2
The first step that companies take to start outsourcing their logistics. In this case, they subcontract an agency to not only take care of the transport, but also the storage of their product. The services offered by the 2PL logistics operator are normal and are usually at the national level.
To understand us, the contracting company (the one that sells the product) manages the logistics because it has to be in charge of coordinating the vehicles and preparing customer orders in the warehouse. The logistics agency only offers the resources (it rents you trucks, for example), but it completely disregards its organization and management.
Logistics Operator PL4
4pl logistic operators (also known as “logistics lead providers”) are responsible for supply chain management. What does this mean? Easy. They are dedicated to planning, supervising, locating, coordinating and optimize the chain, but they do not take care of the most “physical” part since they do not have their own resources (warehouses and fleet of vehicles).And you will ask yourself: “so what do they do if they do not have infrastructure or personnel?”. The answer is simple: they hire 3PL logistics operators that offer them all the personnel and technological resources they need.
Basically, if a company hires a 4PL, they want to get rid of the pitfalls of supply chain management for their product. The operator becomes the manager of this area.
Logistics Operator PL5
5pl logistics operators are the most advanced, the PRO in the sector. They are responsible for managing the acquisition of resources, storage, distribution, deliveries, after-sales service and returns. But hey, that doesn’t mean they execute it. They only carry the management, the 3pl and 4pl operators that subcontract are in charge of the execution part.
If a company hires this type of supplier, it is because it wants to completely disassociate itself from the product supply chain and logistics. He does not want to know anything about this area and leaves it 100% in the hands of an external company.
Now yes, let’s see what are the advantages of hiring a 3pl service.
Benefits of hiring the 3pl service for your company
Having an external service to handle the logistics of your company has many advantages, let’s go one by one:
Reduction of economic costs: this is one of the main reasons why many companies hire an external company to handle logistics.
No matter what, the capital investment is less than if you take care of it internally. And for different reasons, for example there is a decrease in costs when there is a reduction in the rates of transport services. In addition, if you leave it in the hands of experts, you will not have to supervise the product supply chain every day and you will not have to hire the necessary people, facilities and technologies in-house.
- Time saving: Autonomously organizing the logistics management of your product involves an investment of time that few people have. If you let another company take care of this, you can invest your time in other actions, such as launching marketing campaigns, solving customer doubts, etc.
- Resource control: In some companies, financial, personnel and technological resources are limited. If you opt for an external logistics service, you can relocate these resources and place them in other areas that require more attention so that you continue to grow.
- Dimension and specific preparation:logistics is one of the parts that require more effort. Monitoring, control, demand, storage, processing, control, deliveries… Endless tasks that take up a lot of time and are physically and mentally exhausting. Thus, it is a good option to have a platform that has the experience and capacity to deal with this service and you can forget about all the work involved in organizing logistics management.
- Space saving: There is no doubt that if you hire a 3PL operator, you will save a lot of space. When you do it on your own, you need a warehouse to store your products and the more demand you have, the bigger the space will have to be. On the other hand, if an external agency takes it to you, you do not need to have anywhere to store it.
- Improve the customer experience: shipments in 24 hours are the order of the day. It is rare to find online stores that do not offer it… And if it is the company itself that has to take care of preparing the shipments, managing them, sending them, tracking them, etc. it is clear that it would take 30-hour days and 20 hands to cover it. But if logistics are outsourced, it is possible to offer fast shipping no matter the destination.
- Risk reduction: We all know that there are packages that get lost, that fall into sacks that go to the other end of the country or simply stay in some remote place and never appear. If it is you -as the owner of the company- who has to solve this problem, you will lose time, money and patience. On the other hand, if you have contracted a 3pl logistics agency, this will be the one in charge of solving it. And you wash your hands.
Therefore, if you allow a 3pl company to do its job well, you can save time, resources and increase your productivity to achieve the goals you set for yourself. 3pl is always a good option!