True third party logistics providers offer an fully integrated outsourced logistics solution. Before approaching potential 3PL providers it is important to get an understanding of your needs and what your current pain points are.
The term 3PL is one that has been used quite generously over the years and it is important you have a clear understanding of who you are working with. All logistics providers have their strengths, weaknesses, and origins. Many times in the North American market logistics providers start with one specialty (like trucking or warehousing) and then branch out into additional service offerings either by partnering with other companies (especially in the case of trucking and rail) or using a mixed approach. Also you will come across companies with trucking origins will dabble in warehousing but not have the capabilities for more complex pick and pack, kitting, or fulfillment tasks. That is not to say that there are not many companies with origins in either trucking, rail, or warehousing that don’t provide excellent integrated services. In fact there are many.
Here are examples of typical types of 3PLs:
- Trucking companies that have expanded into warehousing
- Warehousing focused companies that also own their own private fleet
- Warehousing companies who have strong relationships with LTL and Full Truckload Carriers
- Trucking companies focused on intermodal logistics solutions and Ocean Freight
- Warehousing companies that specialize in partnering with Rail Freight Companies
- Companies that refer to themselves as 3PLs but are actually Logistics Software companies
There certainly are many other hybrids and variations of third party logistics providers you will encounter in the industry like freight forwarders for instance, but these are a few of the typical types you will likely encounter. There are also 4th party logistics providers or lead logistics providers that are non-asseted based and don’t own warehousing facilities or trucks.