What is a 3PL? 5 Tips to Choose Best Third Party Logistics Provider

31 March 2018
Import Export Data

Third Party Logistics or 3PL is referred to as managed warehousing, which outsources various elements of international trade logistics and performs various management & logistics functions including inbound freight services, customs clearance, storage & warehousing, order fulfilment & distribution and outbound freight services. What exactly third party logistics is all about? What services 3PL provide? And what things to keep in mind while choosing a right 3PL provider? Let’s discuss through this article.

According to the Council of Supply Chain Management (CSCM), a third party logistics or 3PL provider can be defined as a firm that provides multiple logistics services for use by customers. These services are integrated or bundled together by the provider. The services offered by 3PL fall into two main categories:

1.    Freight Forwarding (FF) Services

Freight Forwarding (FF) services are classified into two evident subcategories; Ocean & Air. It depends on the means of transportation.

Example 1: Suppose shoes have to be transported from Vietnam’s Ho Chi Minh City to Los Angeles through Air FF. 3PL logistics company would pick up goods on behalf of shoe company in Ho Chi Minh City and fly the container to Los Angeles through contracting with a courier company or airline company. At last, these products would then be handed back to the shoe company. 3PL provide Air include cargo pick up at factory and customs clearance.

Example 2: Suppose shoes have to be transported from China’s Shanghai to Los Angeles through Ocean FF. 3PL would pick up the container on behalf of shoe company in Shanghai and sail it to Los Angeles through contracting with an ocean carrier. After this, goods would be handed back to the shoe company.

2.    Supply Chain Management (SCM)

Supply Chain Management goes one significant step beyond freight forwarding by considering the supply chain as a whole and managing container from starting to ending. Modern supply chain solutions provide end-to-end visibility across all supply chain elements. Practically speaking, customers can access to real-time and detailed information about the supply chain of their goods and enabling them to identify the parts where performance is not optimal.

Choosing third party logistics companies is an important decision not only because it is a cost-effective & reliable solution to logistics requirements, but also because building valuable business relationships, which is good for the companies. Now how to select the best 3PL provider? Or what to keep in mind while choosing 3PL? Here are some tips to find the right third party logistics service provider.

Reliability: You should always choose a reliable third party logistics provider, which values a mutually beneficial working relationship. Your provider should understand your challenges and care about your reputation, not just their own.

Convenience: Convenience is of course a good reason to use third party logistics services for transporting goods at the right destination. Your selected 3PL option should have an effective warehouse, modern & efficient vehicles and other resources to transport goods from one place to another in a convenient way.

Technology: In order to stay competitive within the contemporary environment of logistics, companies must be equipped with the latest IT technologies and systems. So, check whether your selected 3PL logistics providers have customer portal and the latest fleet tracking technology.

Customer Service: Excellent customer service is one of the most importance features of any service provider. Your selected 3PL service provider should give you instant support for any issue dealing with transportation of goods. While choosing 3PL logistics companies, you must read reviews of the company online and check testimonials of existing customers of that company available on various social media platforms.

Quality: Too often, quality of a service is compromised with a price. You should always give priority to quality of 3PL service. You should also think about cost-effective option as well.

So, if you want the best and reliable third part logistics or 3PL, you have to do some research work over the internet. You can check websites of various third partly logistics service providers and choose as per your requirements. You can also go through market research sources like Export Genius that provide import export data of global countries.

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