Third Party Logistics (3PL/ TPL) or Contract logistics

Third Party Logistics (3PL or TPL) other known as Contract logistics is nothing but the outsourcing of various types of logistics activities for a single company from a single or multiple vendors.

When a company gets bigger it becomes difficult for it's supply chain manager or it's management to control each and every activities by their own. 3PL enters at this point of time, 3PL gives flexibility to outsource service providers for handling various logistics activities.

3PL companies offers any types of services like freight forwarding, custom house agency, warehousing, transportation, order fulfilment, picking & packing, forwarding, custom house agent etc.

Benefits of 3PL:

1) Cost saving - You can use services from 3PL companies without investing in equipment, separate business setup, manpower etc. 

2) Flexibility of choosing the best service - You can use services of few companies for short time and decide to enter in a long term contract with the best one.

3) More efficiency - If you use dedicated a dedicated service provider for that particular service, their employees will be trained for that work, hence efficiency will be enhanced.

4) Lower the risk - In case of any delay for obvious reason 3PL service provider will arrange alternate way. 

5) Pay how much you use - If you have your own set up you have to spend a fixed amount to maintain that throughout the year. But if you are using 3PL you need to pay only that much how much you use (this will help during pick & off seasons).