What is Third Party Logistics in Supply Chain Management?

DelGate Team
March 10, 2022
3pl-third party logistics

When you’re an E-commerce business owner, order fulfillment will be an integral part of your operations.

While your business develops, you will figure out that fulfilling customer orders in-house is no longer reasonable. In this case, third-party logistics companies are in action.

Outsourcing eCommerce fulfillment to a third-party logistics service frees you up to focus on growth and customer satisfaction, while experts handle this critical aspect of your business.

Table of Contents

What Do Third Party Logistics Companies Do?

A reliable 3PL provider can efficiently handle inventory storage, order fulfillment, and shipping, acting as a crucial bridge between your manufacturing processes and end customers. With seamless order fulfillment, your business can thrive, as satisfied customers are the foundation of success in the eCommerce industry.

In general, third party logistics providers typically specialize in integrated warehousing operations and transportation services. What they provide is saleable and customized based on customers’ needs, depending on market conditions. In this way, they can meet the demands and delivery service requirements of their customers.

A third-party logistics company is like an eCommerce fulfillment company. They give all of the services you want in order to outsource your logistics operations.

DelGate 3PL warehouses maximize the speed and efficiency of your business. We will handle all your 3pl logistics while you can focus and expand your business without hiring excessive staff. You can work with a 3PL company for your eCommerce fulfillment to reduce your shipping costs and delivery times and increase focus.

Third party logistics services include:

With 3PL, companies can outsource critical logistics functions such as receiving shipments, inventory management, and order fulfillment.

Warehousing
Picking and packing
Inventory management
FTL and LTL freight shipping
Shipping and Receiving
Reverse logistics (returns)
Kitting and customization

These specialized service providers play a vital role in enhancing operations by efficiently managing inventory and facilitating seamless order fulfillment.

With their expertise, 3PL companies receive incoming shipments, meticulously track warehouse inventory, and meticulously pick and pack orders for prompt delivery to end customers.

Operating as centralized hubs, most 3PL warehouses serve multiple clients simultaneously, efficiently handling orders for numerous eCommerce companies. By leveraging the capabilities of a reliable 3PL partner, businesses can optimize their supply chain, streamline operations, and ensure customer satisfaction through timely and accurate order fulfillment.

The role of a third-party logistics company?

DelGate Fulfillment and Warehousing are one of the top third party logistics providers in Canada for weighty, massive, and high-esteem items. DelGate specialized in different types of fulfillment and warehousing in North America. Some of its Vancouver warehouses are equipped for cold fulfillment. They can store or ship food products needing to be refrigerated or frozen or are prepared to store and ship hazardous materials.

What is third party logistics?

3PL (or third party logistics) is usually used interchangeably with order fulfillment. Third-Party Warehouse gives complete eCommerce fulfillment services to its customers.

third-party logistics services:

Warehousing
Order processing

Shipping & Receiving
Customer support

Returns processing
Customization

The 3PL business model is the most widely recognized sort of outsourced logistics company. There are different sorts like 4PL and 5PL, but there are lots of organizations and companies which are keen on 3PL.

DelGate, as a 3Pl company, manages both inbound and outbound transportation for customers and warehousing. We own our own warehouse space to provide 3pl warehouse for our clients. We have contracts with other carriers for doing customer freight and shipping.

Read about Fulfillment Costs; Know Everything About 3PL Warehousing Costs

Third-party logistics outsourcing

Companies that use third-party logistics

Companies that use third party logistics have discovered the advantages of utilizing 3PL services to enhance their supply chain operations. Whether it’s online retailers looking to streamline order fulfillment or manufacturers seeking efficient transportation solutions, 3PL providers offer tailored services to meet the unique needs of each business.

From technology companies requiring secure and reliable storage to food and beverage businesses in need of temperature-controlled warehousing, the versatility of 3PL providers allows companies of all types to optimize their logistics processes.

By partnering with experienced 3PL providers, companies can leverage their industry knowledge, infrastructure, and expertise to achieve cost savings, improve customer satisfaction, and focus on their core business objectives.

Types of third-party logistics

Third-party logistics (3PL) services encompass a wide range of specialized solutions tailored to meet the diverse needs of businesses.

From transportation management to warehousing and distribution, there are various types of 3PL services available.

Freight forwarding providers assist in international shipping and customs clearance, ensuring the smooth movement of goods across borders.
Contract logistics companies offer end-to-end supply chain management, including inventory management and order fulfillment.

E-commerce fulfillment providers specialize in order processing, packaging, and last-mile delivery. Additionally, there are value-added services such as packaging customization, product labeling, and returns management offered by some 3PL providers. These different types of 3PL services enable businesses to select the specific solutions that align with their unique requirements, ultimately enhancing operational efficiency and customer satisfaction.

Third party distribution

Fulfillment by Amazon (FBA) became available to Canadians selling in the marketplace in 2012. For many, it was their introduction to third-party order fulfillment. Canada’s e-commerce platform, Shopify, is opening its fulfillment warehouses to improve the ordering process for small businesses.

They recently introduced the Shopify Fulfillment Network and acquired 6 River Systems to improve warehouse operations. e-Bay will launch its managed delivery fulfillment services here in Canada next year. Sellers will have access to national storage, packing, and shipping services for a smoother experience.

Third party logistics in Canada

Canada has been a long time coming to use the Internet for sales and marketing, but that has changed in recent years. Companies large and small have ventured into the digital world of opportunity. Still, nearly half of the small and medium-sized businesses don’t have a website.

Only a small portion of those with a website also have an e-commerce functionality. One of the biggest obstacles standing between them and the profits that await them online is order fulfillment.

Many small businesses and independent entrepreneurs are intimidated by logistics and services designed to make order fulfillment easy. It may seem complicated at first glance, but it’s actually very simple: you make the sales, and the third party logistics firm fulfills them.

Larger companies are also leveraging third-party logistics to reduce their real estate footprint, simplify order fulfillment, lower shipping costs, reduce staffing requirements, and basically wash their hands of all the manual stuff.

The Economy Of Vancouver

Vancouver’s economy is one of Canada’s most vibrant. British Columbia City is Canada’s official gateway to the Pacific, a major port, and the major western terminus for transcontinental highways and rail lines. Vancouver has successfully transitioned from a predominantly resource-based economy to a diversified knowledge-based economy and has been the fastest-growing economy in Canada in recent years.

Trade and international trade are key sectors of Vancouver’s economy. The city has Canada’s largest port and is a major North American gateway for pan-Pacific trade. The Port of Vancouver ranks first in North America by total foreign exports and second on the West Coast by total cargo volume. The Port of Vancouver is Canada’s largest and most diverse port.

3PL in Vancouver BC

If you are thinking that third party logistics or a prep and shipping business would be a promising investment, you are right. As a startup, Canadian third party logistics companies are some of the fastest-growing businesses in Canada. Related products and services are growing with them. For example, the 2019 Report on the Business Ranking of Canada’s best-growing Companies named Fleet Optics the fastest-growing Canadian company.

They deliver last-mile deliveries in Ontario, using their own optimized tracking software. Clearly, the fulfillment options for Canadian companies are growing in both number and diversity. If that’s what stopped you from selling online, it’s time to take another look.

Third-party logistics industry

Vancouver City in British Columbia is the most populated city in the province, making it the eighth-largest municipality in Canada. The city is home to an ethnically diverse population and as a result, is classified as a global Beta city. It is often considered to be one of the best places to live in the world.

The combination of high quality of life, ample amenities, and diversity has contributed to the city’s rapid growth in the recent past. Today, the city has a booming economy that shows no signs of slowing down. The excellent travel and communications infrastructure, including world-class ports, harbors, and the highway system, also contribute to this.

Global third party logistics

Companies began to trend toward outsourcing inbound and outbound logistics services to third parties in the 1970s and 1980s.

With the introduction and growth of e-commerce in the 1990s and 2000s, the term third party logistics became ubiquitous and 3PLs expanded their services. The supply chain integration of warehousing operations and transportation services has become what we now call third party logistics.

The global third-party logistics (3PL) market was valued at $1,027.71 billion in 2019. It is projected to reach $1,789.94 billion by 2027, registering a CAGR of 7.1% from 2020 to 2027. In 2019, the Asia-Pacific region held the largest share of the global 3PL market.

Conclusion

Choosing the wrong third-party logistics company can be disastrous. Before you approach 3PL companies, you should identify and outline your requirements. Analyze your current performance, outline your current supply chain costs, and examine your existing shipping relationships.

If you are thinking that third party logistics or a prep and shipping business would be a promising investment, you are right. As a startup, Canadian 3PL companies are some of the fastest-growing businesses in Canada.

The excellent travel and communications infrastructure, including world-class ports, harbors, and the highway system, make Vancouver the best place to have a third-party logistics company.