What is 3PL?
3PL (third party logistics) services are a way for a company to outsource logistical management of their products to increase efficiency. It involves hiring an external firm to take responsibility for logistical operations, so that movement and storage of stock is handled by the 3PL provider. Some 3PL providers will add value by also offering services such as product tracking, security and software installation.
Why use 3PL?
The main reason for using 3PL services is that it increases efficiency. By moving products for several different businesses at the same time, 3PL providers offer an economy of scale that is passed on to the business – in other words, it is cheaper for a 3PL company to move lots of stock for different businesses than it is for those businesses to each move their own. Using a 3PL provider also means that the business can be more focused on its core practices, usually retail, and removes a level of complexity from their business model.
What types of 3PL are there?
3PL can involve freight-forwarding, courier services and logistical organisation. There are three essential levels of 3PL, which can be distinguished by the level of integration between the 3PL provider and the firm hiring them.
At the most basic level, 3PL simply involves collecting, packing, storing and delivering goods – e.g. a courier service.
A step up from this is when the 3PL service includes tracking software so companies always know exactly where their goods are and what stage of delivery the 3PL provider is up to. Additional services at this level might involve individual packaging or increased security, but the main difference between this and the basic level is that the 3PL provider is more focused on getting information to the client, and on achieving economies of scale.
At the highest level of integration a 3PL provider might take over a client’s entire logistics chain, increasing efficiency at every stage from production right through to bringing the products into a store and keeping track of stock at every stage, even running the point of sale (POS) system to evaluate where and when new stock needs to be delivered. Providers that offer this level of service tend to have few clients, but work with them extensively to ensure that all of their needs are met. A 3PL provider at this level might sub-contract transportation services to more basic 3PL companies.
Why Pendulum Logistics?
Pendulum Logistics offer services catering to all levels of logistical needs for small to medium sized businesses. Pendulum offer packing, transport and storage for anything from sim cards to alcohol crates, as well as the logistical support to go with them, right up to installing the most modern POS systems to ensure accurate stocktake reporting.
