Engaging the services of a 3PL can really help you get your business off the ground, both figuratively and literally (air freight, anyone?). When describing themselves, most 3PLs tend to follow the same format, giving you a brief overview of what they are and what they do.
3PL is shorthand for third party logistics, and has become a term widely used to describe any company that deals with the logistics of order fulfilment, including logistics software.
So which type of third party logistics company is best suited for your business?
There are different kinds of 3PLs around and choosing the right one is essential to maximising the potential of your supply chain.
Asset based 3PL
An asset based 3PL has its own equipment for use within the supply chain, for example, various types of vehicles for transportation or warehouse space.
3PLs that fall under this bracket often have hands on experience with all aspects of distribution, from storage, pick and packing, freight forwarding and more. Using an asset based 3PL cuts out the middle man as you’re dealing directly with the company who will be packaging and distributing your products.
Non asset based 3PL
A non-asset based 3PL usually does not have its own fleet of vehicles, warehouses or other associated parts of the supply chain. What they do have is a selection of partner companies who provide these services, and can pair business owners with a single provider or several to mix and match different services.
In essence, they provide a logistics management package and can oversee your order fulfilment as much or as little as you need. Experienced non-asset based 3PLs should be able to provide you with a complete warehousing solution based on your criteria and the abilities of their partners.
These are just two common examples of 3PL providers, and there are many companies who fall in between these two brackets, offering different services depending on their size, location and experience.
It’s fine to ask questions when approaching a 3PL for the first time and more often than not, is highly recommended so both you and the 3PL know exactly what you’re after in terms of a logistics provider.