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What is 3PL?
A 3PL (third-party logistics) provider offers outsourced logistics services, which encompass anything that involves management of one or more facets of procurement and fulfillment activities. In business, 3PL has a broad meaning that applies to any service contract that involves storing or shipping items. A 3PL service may be a single provider, such as transportation or warehouse storage, or it can be a systemwide bundle of services capable of handling supply chain management.
How third-party logistics work
Here is an example of how 3PL arrangements operate: A book publisher hires writers, editors and graphic designers to produce publications, but it may not want to handle the consumer ordering process or transportation of book shipments. Instead, the book publisher uses a fulfillment center to process its online orders and hires a trucking carrier to haul its freight. The fulfillment center and carrier both act as 3PL providers. It's possible for a single 3PL provider to fulfill and ship book orders, too. By contracting with a 3PL provider, the book company can use supply and distribution services only when needed, thus controlling costs more effectively while focusing on its core competency of producing books.
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Aspects of 3PLs probably date back hundreds, if not thousands, of years. The Council of Supply Chain Management Professionals traces the actual 3PL abbreviation to four decades ago. "The term 3PL was first used in the early 1970s to identify intermodal marketing companies ... in transportation contracts," the council wrote in a glossary. "Up to that point, contracts for transportation had featured only two parties, the shipper and the carrier." The Motor Carrier Act of 1980 deregulated the trucking industry, which reduced trucking rates and increased the amount of competition, all of which fed into 3PL concepts. The term 3PL got bandied about more by consultants and during conferences in the 1990s, likely tied to evolving technology, including the rise of the internet. Later, the Consumer Product Safety Improvement Act of 2008 legally defined 3PL: "The term third-party logistics provider means a person who solely receives, holds or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product." According to a frequently cited 2017 report from Armstrong & Associates, a supply chain consultancy, 90% of domestic Fortune 500 companies rely on 3PL providers to handle logistics, compared to the 46% Armstrong reported in 2001. The growth in online sales and increasing consumer demand for faster delivery and lower prices have spiked demand for 3PL services. 3PLs have also bloomed thanks to tracking technology, such as radio frequency identification (RFID) and global positioning system (GPS), both of which offer extended supply chain visibility. Meanwhile, internet of things (IoT) technology has improved tracking metrics for trucking and other carriers.
The benefits of 3PL
The primary benefit of using a 3PL service to handle logistics, such as packaging, warehousing, fulfillment and distribution, is cost savings -- for example, not having to maintain a warehouse or the staff to monitor supply chain operations. A 3PL service likely offers better performance on efforts such as shipping while also enjoying an easier ability to scale its operations. If the publishing company in the example above suddenly needs to ship more copies of a popular title, a fulfillment center will have an easier time meeting that demand than if the publisher itself had to ship additional copies of the book.
Transportation managers/decision makers choose us for many reasons
- Immediate Access to capacity
- Experience
- Existing carrier relationships
- Perspective
- Negotiating skill
- Established credibility
- Proprietary technology for locating capacity and evaluating market conditions
- Spot quotes or dedicated lanes, we have you covered
- Advanced Technology for tracking- GPS TAB
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Testimonials
Over the past 10 months, we have been using 3PL Advantage for many of our partial and full truckloads. They have done an outstanding job and provide excellent service. They offer affordable pricing and their customer service is second to none. I would strongly recommend their service for any companies out there looking for a great dependable broker/carrier.
I have been working with 3PL for 2 years now and their service is always professional, efficient, and honest. They handle our freight all over the US and always keep us updated – which I find to be key! We are a company that tends to need trucks very last minute and 3PL always delivers.
Our company has been working with 3PL Advantage for 3 years. We receive fair rates and James does a phenomenal job keeping communicating the status of our shipments. They’ve been there when we need last minute trucks on many occasions. I’d recommend 3PL to anyone who wants a reliable logistics company.
