Third-Party Logistics (3PLs): Types, Advantages, Services & Role in Supply Chain

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Every company’s supply chain management system relies on third-party logistics companies to cater for their supply needs.  3PLs have helped companies in GTA, Canada to enhance customer service by linking them to both local and international distribution links, at the same time, these logistics companies have played a key role in establishing the insider knowledge on imports and exports coming and leaving the nation.

Among the services that you’re likely to get from a 3PL company, the following are most common:

  • Freight consolidation
  • Warehousing services
  • Distribution services
  • Freight management on customers’ behalf
  • Inbound freight
  • Order fulfillment

Although the services offered by these logistics companies are not limited to those mentioned above, they are the primary functions you will find in any 3PL Links service provider. It is of importance to say that most of these services are outsourced differently by various companies to suit their needs. The functions mentioned above can be put in several categories that could be termed as the different types of third-party logistics providers.

Transport-based 3PLs

Here, the functionality in practice is the distribution services from one location to another. A good example would be shipping cargo from one company to another company’s warehouse. The distribution could also be between your company and the customer you serve. Transportation based logistics companies dealing with parcel delivery mostly depends on several factors; the point of origin, the destination, time-limit, mode of shipment, and the prices or discounts given.

The cost of international freight services mostly depends on the import transportation fee for the product in question. Export duties could also be embedded in there.

Warehouse & distribution-based 3PLs

As the most popular 3PL practice, warehousing has three main sub-faculties; storage, shipment, and returns. There are various types of warehouses, and the variation is dependent on the size and shape of the warehouse. The most important consideration to make when you consider warehousing solutions is the kind of network you want. If your customers require their orders delivered within a short time-frame, then there have to be several warehouses located in your distribution network. For delivery fulfillment purposes, it is recommended that a warehouse be located close to the final consumer.

Financial and info based 3PLs

In today’s economic dynamics, you will hardly find an e-commerce company that hires a commercial based 3PL company whose revenue is not in the tunes of hundreds of thousands or millions of dollars. Info-based 3PLs and financial, logistic companies will help you in the following ways;

  • They will help you optimize all your logistic links
  • Cost control and accounting
  • Efficient freight auditing
  • Provide monitoring tools, tracking, booking, and inventory management capabilities.

Outsourcing for logistics solutions from a 3PL company comes along with several advantages, especially if you are in located anywhere in Toronto, or in the GTA. First of all, we all know Canada prides in first-world class infrastructure. This is important when it comes to the transportation of goods from the country into all the North American markets. Other advantages include the following

Customized service

Most third-party logistics companies are flexible in service delivery. With 3PLs, you can customize your service delivery model, to either use a full-service one-on-one delivery or just a single service. This way, you can cater to the cost of the services that your business needs, which is a perfect way to increase performance while minimizing the costs.

Cost reduction

When you hire a 3PL company, your worries on the warehouse overheads, packaging, or the logistics department will be a thing of the past. You will only have to pay a flat fee to the company, and you’re good to go. This way, your logistic overheads will be kept low and steady.

Besides striking a low on your overheads, 3PL companies keep you from loss of unsold inventories. How? Third-party logistics companies can optimize your inventory levels and also can do forecasting analysis.

Final thoughts

There is nothing worthwhile as far as your logistic needs are concerned, that can supersede what a Third-Party Logistics company can do for the supply chain distribution company in your department. The benefits are immense especially when you outsource for 3PL Links from Toronto. All your transportation and warehousing needs will be professionally handled.

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