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Selecting a 3PL

A lot of companies have gone in for outsourcing in a big way. This has indeed taken up speed in view of the cost cutting measures that are of essence in today’s world. 3PL essentially refers to ‘Third Party Logistics’ companies that specialize in providing logistics solutions to companies that need these services. Some of the services that 3 PL companies provide include warehousing, transportation as well as other supply chain management services that are critical to business success. In today’s networked and highly connected world, 3 PL services are extremely important for companies that would like to focus on their key strengths or competitive advantage and get on by outsourcing the logistics requirements to a 3 PL vendor.

Depending on the kind of services and expertise level that you need, you should select a 3 PL vendor. If you need very basic level transportation and warehousing services, a bare minimum level or standard 3 PL Provider would suffice. Such a company provides 3 PL service as an add-on, in order to make use of its excess capacity and capabilities in this realm with the objective of increasing its revenue. On the other hand, there are some instances where the 3 PL vendor is required to provide more sophisticated and developed level of services including tracking and monitoring of goods, security system provision as well as special packaging services. Needless to say, such services can be provided by a service developer company that deals only in 3 PL services and has the installed capability and expertise in providing these advanced facilities. The cost would obviously be higher and such services are generally availed of by companies that need to store and transport high cost items where the risk of loss could be very high.

In addition, selecting a 3PL is heavily linked to the budgets of companies. There are some companies that are known as customer developers in 3PL Terminology. These companies offer highly specialized services that are closely integrated with the operations of the client and serve to take over the entire logistics function of the client. Here, the business linkage of the service provider to the client is so interminable that the logistics function is evaluated based on how efficient it is and its payment is made accordingly. 3 PL services are key to a company’s success and only those companies that can provide on-time and reliable services would make the cut.

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