FIVE BENEFITS OF THIRD PARTY LOGISTICS
Cost reduction 3PL providers work with carriers on behalf of multiple customers and are often able to leverage better rates than individual shippers , thanks to their collective volume and order frequency .
Better customer experience The so-called ‘ Amazon Effect ’ means today ’ s customers expect next- or sameday delivery as standard . A 3PL provider can help here , as they have efficient and established distribution networks .
Risk mitigation Disruption continues to dog supply , and when problems do arise , 3PL providers are responsible for finding alternatives and solutions . They are also insured against the loss or damage of your products .
Instant expertise and knowledge Logistics is complex , but engaging with experts can improve the way an organisation ’ s logistics operation functions , leaving it free to focus on other areas of its business .
International logistics Most 3PLs offer knowledge and expertise around international logistics , which is ideal for those looking to expand into a new territory or markets without the risk of investing heavily in local warehousing space or staff . Plus , 3PLs handle the welter of duties , customs and documentation that comes with cross-border trade .
SUBCONTRACTED LOGISTICS : A GLOSSARY
First party logistics ( 1PL )
• Basic subcontracting dedicated to nationwide transport services .
Second party logistics ( 2PL )
• Storage and warehousing services are added to transport services .
Third party logistics ( 3PL )
• Companies that provide services and expertise across the supply chain as a whole , including monitoring , communications and customs formalities .
Fourth party logistics ( 4PL )
• Consulting companies offering digital integration solutions over and above the resources offered by 3PLs .
Fifth party logistics ( 5PL )
• The provider offers expertise in engineering and innovative systems across supply networks .
“3PLs generally have more experience in the area of logistics automation ”
TOM WOODHAM PARTNER , SUPPLY CHAIN TRANSFORMATION , PWC
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