Logistics is the process of planning, implementing and controlling the efficient, on-time and cost effective flow of goods from point A to point B. In a more general sense, logistics refers to anything that concerns the arrangement or movement of people or things from one place to another. Logistics service providers help businesses move their products across different parts of the world through a number of services they offer such as supply chain management, transportation & warehousing among others. This post will discuss all about what logistics service provider's do and how they can be beneficial for your business.
Logistics Service Providers (LSPs), often referred to as third-party logistics (3PL) providers, are outsourced companies that shippers utilize to manage warehousing, distribution, and freight transportation. As a result, LSPs have superior tools, technology, expertise, and services compared to freight brokers, even though they operate under the same FMCSA authority.
LSPs take a "big picture" approach to more complex shipping solutions, leveraging top-tier transportation management systems (TMS) and business intelligence (BI) to optimize their human resources, processes, industry knowledge, and technology.
Many shippers consider integrating a third-party logistics provider for cost savings, but soon realize there are numerous advantages, including:
Many 3PL companies specialize in various supply chain facets and provide a wide array of logistics services. Most logistics services fall under one of the following categories:
Procurement refers to the process of ordering and receiving inventory from other areas of the supply chain. 3PL procurement and receiving services may include:
Order management, fulfillment, and distribution are core 3PL responsibilities. 3PL order fulfillment services may encompass:
Order fulfillment can happen at various points in the supply chain, including eCommerce, distribution to 3PL customers, retail, etc.
A key 3PL duty is overseeing the secure storage of inventory until required elsewhere. Warehousing services may include:
Distribution refers to moving inventory from a provider's warehouse to other supply chain entities or end-consumers. Distribution methods may include:
In addition to the services above, 3PLs frequently offer:
Partnering with a 3PL like Simpl can provide businesses with end-to-end supply chain solutions, inventory and warehouse management, and other logistics resources to optimize operations. Contact us today at (737) 225-8846 to discuss how we can help!
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The main services offered by 3PL providers include procurement, order fulfillment, warehousing, distribution, transportation, freight services, reverse logistics, consolidation/deconsolidation, and more.
Working with a 3PL can save money through increased efficiencies, better technology and systems, access to carrier networks, and more. They have expertise to optimize the supply chain.
Many industries leverage 3PL services including retail, ecommerce, manufacturing, wholesale, and distribution companies. Any company with complex logistics can benefit.
Procurement refers to the ordering and receiving of inventory. 3PLs can manage ordering products from suppliers when inventory levels are low in the warehouse.
Order fulfillment includes receiving orders, picking/packing products from the warehouse, and arranging for shipping and delivery to customers.
3PLs plan optimal transportation routes and modes (LTL, FTL, parcel, etc) to distribute orders from the warehouse to customers or downstream supply chain partners.
Reverse logistics refers to managing product returns back up the supply chain. 3PLs create systems to handle returns to minimize friction and costs.