3rd Party Logistics (3PL)

Logistics is a term used to describe any aspect of transportation, tracking, packaging, and delivery of goods. There are several tiers of logistics that a business may use. In the area of ecommerce or online retail, 3rd party logistics is the most widely used as it covers all the bases of logistics that a retailer may need. An online retailer can use a 3rd party logistics company to provide a door-to-door delivery service to their customers.

How Does 3PL Work?

A 3rd party logistics provider will very often make use of 1st and 2nd party logistics operators. So let’s first look at these to place them in context. 1st party logistics are localized companies dealing in the direct movement and storage of goods within a limited geographic area. Examples of these would be port operators, carrying companies, and storage depots

2nd party logistics refers to the handling of goods on a larger scale and these will usually operate on a national level. This includes transportation, warehousing, and storage. A courier service or trucking company will fall into this category.

3rd Party logistics includes the previous two tiers and will also add other services that make it easier for an ecommerce business to operate more efficiently. A 3rd party logistics company makes life easier for the ecommerce business owner by handling all the details of international freight. Companies offering 3rd party logistics will usually work on a long-term contract and may offer many customized services to their clients. They can offer other services like packaging and forecasting.

Many international courier companies offer specialized services to cater to the needs of ecommerce business owners. This would include fixed rates for collection and delivery to any destination in the world, as well as online tracking for both the customer and business owner.