What is a 3PL Company and How Do They Help Small Businesses?
Small businesses that compete against large supply chains usually struggle to keep up with logistics in the market today. Large businesses can use their massive resources to move goods quickly and without excessive expenses. However, when it comes to smaller companies, shipping products is far more complicated. Unless they partner with a reliable 3PL company, small businesses have to do a lot of maneuvering to avoid delayed shipments and unexpected costs.
Partnering with a capable 3PL allows small companies to keep pace with large supply chains by helping them ship their products effectively, quickly, and at a reasonable cost.
What is 3PL?
What is 3PL logistics? Although the trend of small companies partnering with 3rd party logistics has been on the rise for quite some time, many people still wonder, what does 3PL mean?
The definition of 3PL isn't complicated to comprehend. 3PL stands for 'third-party logistics,' and it represents a company that offers logistic services to take care of important aspects of shipping operations.
By offering customized services, 3PL companies can easily meet the specific needs of your business. It's up to you to decide how much help you need. Providers can offer a single service or a bundle of services that may extend across several aspects of your company.
Examples of 3PL
- Transportation: Working with a 3PL service can lower your transportation costs but it will also drive efficiency and develop concise solutions to complicated supply chain challenges. 3PLs engage carriers, work with private fleets, keep track of all insurance documents, and freight payments.
- International shipping: Global shipping can be extremely stressful for small businesses. 3PL providers can take care of all crucial aspects of global shipping, such as freight forwarding and customs. They are a representative of your company, and as such, they make sure execution goes as planned, all trade compliance requirements are fulfilled, and all costs are managed. For example, CSA Transportation can take care of all your needs for shipping from the US to Canada (and back).
- Information technology: 3PLs often use sophisticated information technology tools to manage transportation, customer relations, eCommerce, and warehouse operations. They mostly use advanced cloud systems to provide increased visibility across supply chain operations, including shipments in transit.
The Benefits of 3PL
Not all 3PL companies offer the same services or have the same capabilities. However, all of them offer solutions for managing shipping, packaging and inventory, providing reliable logistic solutions, and maximizing your company's profit.
Here are just two of the most important benefits of 3PL:
- Saving time and money: As your business grows, all operation-related costs grow. After investing in a partnership with a reliable 3PL logistics company, you no longer need to buy or rent warehouse space, labor, technology, and logistic operations. You will also save time by outsourcing many tasks via 3PL.
- Company growth and expanding reach: Ecommerce professionals don't have the time to learn everything about logistics, shipping, and warehousing. 3PLs are experts in these fields, with many crucial connections across the globe, including partnerships with custom packaging providers, marketing agencies, etc.
When to Use 3PL
Almost every business can benefit from using 3PL. Let's go over the three signs a company is ready to outsource fulfillment:
- Shipping more than you can manage: Once you realize you're asking family members or friends to help you with packing and shipping your goods, it may be time to consider partnering up with professionals.
- Running out of inventory space: As the orders scale up, you will need more storage space. 3PL services will provide you with all the space you need for your inventory.
- Following the free 2-day shipping standard: Since Amazon has made free 2-day shipping a standard in eCommerce, it has been difficult for small businesses to keep up and offer that same service to customers. Partnering with a reliable 3PL can make free 2-day shipping possible and profitable even for small online stores.
How to Select a 3PL Company
With so many different 3PL companies offering a wide array of various services, choosing the right one can seem like a tricky task. It's crucial to find a fulfillment company you can trust with your inventory, and that helps you provide a positive purchasing experience for your customers.
Here are several important points to have in mind when choosing a 3PL service:
- Consider passing on companies that haven't been in business for more than a couple of years. Experience brings expertise and connections, and you need both from your 3PL.
- Many 3PLs are experts only in specific niches or specific operations, so you should learn about the strengths of the company before partnering up. Here at CSA Transportation, we are experts in LTL freight shipping.
- A 3PL should have a good safety rating, an established business history, and a sparkly clean reputation in the industry.
Optimizing Business Management
For small businesses, managing the packaging and shipping of goods usually costs a lot of time and money. Businesses need a solution that will allow them to keep up with the big players if they want to stay in the game. If the customer wants a fast, cost-effective shipment similar or identical to the one he or she gets at Amazon, your store needs to find a way to deliver.
3PLs are logistic experts that specialize in supply chain management. They help companies streamline the entire shipping process with improved logistic efficiency and cost-effectiveness. Any business that's experiencing rapid growth can benefit from working with a 3PL company.
A reliable 3PL provider can help a small online store stay in the game and keep up with the big names. When selecting the right 3PL for your business, you're selecting a partner that represents your company and helps you grow your business. Make sure you ask about everything you need to know and learn about every aspect of the 3PL before making a decision.
If you’re looking for help with shipping loads from a single pallet to a full truckload, CSA Transportation has you covered. Contact us at 855-SHIP-CSA or get a freight quote online today!