3PLs Third-party logistics

Give the Brief Introduction of 3PLs.

Answer: Third party logistics is the organization in logistic along with supply chain management, which outsource their elements, namely distribution, fulfilment services as well as warehousing through a third party company. Third party logistics provides integrated operations such as warehousing along with transportation according to the customers’ needs and wants. Sometimes, the third party logistics provide some additional services to the customers in respect to the production of goods and services. The organization who provide such services known as third-party supply chain management providers. Third party logistics mainly target few functions which can be provide to the customers such as providing raw materials, transportation as well as supply of goods management. This is how the third party logistics works in a market and prevails there to earn profit from the market.

When did the 3PLs has started and whom?

Answer: The 3PLs started in 70s and 80s when the company started to outsource the third party company for doing the other valuable work for the company. In the year 1996, the concept of 3PL actually registered when the company Accenture came into the market as a third party logistic company. Accenture was the first to introduce the concept legally into the market, until then the concept of third party logistics is there in the market but it was illegal and known as HR 4004. After that, various definition of third party logistics came into existence but officially, it is term as third party logistics.

What was the need of this 3PLs?

Answer: The Company need the help of third party logistics to optimize the shipping as well as warehouse facility. This is need to fulfil and distribute services to ten customers with high demands. It enables the ability to scale operation and to meet the demand of the customers during the peak time. It helps in cost saving and help to control the flow of the products and services. It provide access to the warehousing facilities to the customers. The comp-any need not to invest huge amount of capital as this is a third party logistics who works on behalf of the client company. There is need of the third party logistics in the market for the betterment of the company who lacks in the distribution system.

What is the uses of these 3PLs?

Answer: There are huge uses of the third party logistics in the market or in front of the clients. The logistics possess on ground knowledge of the local markets as well as regulation and government agencies along with the understanding of the capacity of the market. It reduces the cost as well for the client company, which will help them to sustain in the market. It help the company to achieve environmental objectives and enhance the security services. It improves the quality of the services or products offer to the customers by the company. The third party logistics speed up the growth process of the company who are their clients. It also eliminates the negative factors, which prevails in the market and can harm the growth and sustainability of the company.

What is the advantages of 3PLs?

Answer: There are certain advantage of the third party logistics, which need to be look by the companies so that they can take the advantages and make their services even better in the market to sustain as well as grow in the market. It help the organization to save cost along with the time. There is chance of low capital commitment as the client company gave all the responsibilities to the third party organization so there is no need to setup any additional warehouse for the client. This reduces their cost as well. As the logistics are taking all the burden of outsourcing, so the company can focus on the core business. There is a high chance of flexibility in geographical distribution. The company also offers a large variety of services to the clients.

What is the disadvantages of 3PLs?

Answer: With the advantages comes various disadvantages, which need to be address properly by the organization. There is a chance of loss of control in the distribution system by the client as they are using third party logistics for the warehouse, distribution and transportation. There is also a risk in loss of data as few important data and even there is chance of delay, which may cost the company a huge sum of money. There prevails a disadvantage for the company who is dealing with the customers online as this may affect the company financially. This may be increase the cost of the products or services. As there is a chance of increase in the cost of the product or service.