Thinking about utilizing a third party logistics provider? This article highlights four things you should know about third party logistics.
1. Different Types of Third Party Logistics
3PL is a term used for many different types of logistic providers. Each type has its own strengths and weaknesses so be sure to choose the one that fits best with your goals. Below are a few different types of third party logistics providers.
- Trucking companies (that also do warehousing)
- Warehousing companies (that have their own fleet, specialize in LTL or rail freight)
- Trucking companies (focused on intermodal forms of transportation)
Many 3PL providers have just one of these types and some even offer all three types of third party logistics.
Also, consider an asset-based or non-asset based provider. Learn about the differences here.
2. Lower Rates
When you choose to work with a 3PL you can take advantage of lower rates. Typically, logistics providers have special rates they can provide you with to help save you money in the long run.
3. Lower Risk
When you work with a 3PL you can start to build an efficient, multi-location distribution network with a lower risk. Without a third party logistics partner, you would have to invest significant capital to build up a distribution network.
4. Extra Resources
When you work with a third party logistics provider you gain all of their resources as your own. Each provider has their own resources, so make sure to pick one that fits with your needs. Below are a few resources a 3PL can provide.