What is a 3PL? Third Party Logistics: Meaning & Process

A Third Party Logistics (3PL) provider is an external partner that manages all or part of a company’s logistics operations. This includes services like warehousing, order fulfilment, transportation, and inventory management. By outsourcing these functions to a 3PL, businesses can focus on their core competencies while ensuring that their supply chain operates smoothly and efficiently.

How Do 3PL Warehouses Work?

3PL warehouses are the backbone of third party logistics services. Here’s an overview of their operations:

  • Ownership and Leasing: 3PLs may own or lease their warehouse facilities, allowing flexibility to scale operations based on client needs.
  • Essential Equipment: Warehouses are equipped with forklifts, conveyor belts, pallet jacks, and advanced warehouse management systems (WMS) to streamline operations.
  • Staffing and Training: 3PLs hire skilled personnel and provide ongoing training to ensure efficient handling of goods and adherence to safety protocols.
  • Inventory Tracking: Utilising sophisticated WMS, 3PLs offer real-time inventory tracking, seamless e-commerce integration, and data analytics to optimise stock levels.
  • Security Measures: Both physical security (e.g., surveillance cameras, access controls) and digital safeguards (e.g., cybersecurity protocols) are implemented to protect client inventory.
  • Receiving Process: Upon arrival, shipments are verified for accuracy, inspected for damages, and logged into the inventory system.
  • Fulfilment Process: Orders are picked, packed, and shipped using optimised routes and carriers to ensure timely delivery.

What Is 3PL Logistics & What Does a 3PL Provider Do

Third-Party Logistics (3PL) refers to outsourcing supply chain operations, including warehousing, transportation, and order fulfilment, to a specialised provider. 3PL services help businesses streamline logistics, reduce costs, and improve efficiency.

Third Party Logistics providers offer a range of services to streamline supply chain operations:

  • Inventory Management: Monitoring stock levels to prevent overstocking or stockouts.
  • Warehouse Storage: Providing space and organisation for products until they’re needed.
  • Order Fulfilment: Processing customer orders from picking and packing to shipping.
  • Returns Processing: Handling returned goods efficiently to minimise losses.
  • Transportation & Shipping: Coordinating the movement of goods from warehouses to customers.

Alternative terms for 3PLs include fulfilment companies, order fulfilment centres, and fulfilment warehouses. By partnering with a 3PL, businesses can enhance supply chain efficiency, reduce operational costs, and improve customer satisfaction.

Why Do You Need a 3PL?

Engaging a 3PL can be a game-changer for both e-commerce and traditional businesses, offering significant advantages in logistics management.

One of the biggest benefits of third party logistics is cost savings, as businesses can reduce expenses related to warehousing, transportation, and staffing by outsourcing these operations.

Additionally, 3PL providers bring specialised expertise and advanced technology, improving efficiency through faster, more accurate order processing and inventory management.

By handling logistics, a 3PL allows businesses to focus on their core activities, such as product development and marketing, enabling them to scale and grow without being burdened by supply chain complexities.

Comprehensive 3PL Solutions for Ecommerce

For eCommerce businesses, a 3PL warehouse is the backbone of smooth order fulfilment. These logistics providers handle everything from storing products to picking, packing, and shipping orders efficiently. Unlike private warehouses, a third party logistics warehouse serves multiple businesses, reserving dedicated storage space for each client’s inventory. This shared infrastructure allows businesses to scale operations without investing heavily in logistics.

The core services offered by a 3PL logistics provider include:

  • Warehousing: Secure storage of products with advanced inventory tracking systems.
  • Inventory Management: Real-time monitoring of stock levels to prevent shortages or overstocking.
  • Picking and Packing: Efficient selection and packaging of products for shipment.
  • Shipping and Receiving: Coordinating with carriers to ensure timely deliveries.
  • Freight Services: Offering FTL (Full Truckload) and LTL (Less Than Truckload) shipping options to optimise freight costs.
  • Freight Forwarding: Managing international shipping and customs clearance.
  • Kitting and Bundling: Customising packages for subscription boxes or promotional offers.
  • Reverse Logistics: Handling returns and exchanges to maintain customer satisfaction.

With these 3PL logistics solutions, businesses can improve efficiency, reduce costs, and enhance the customer experience.

Understanding 3PL Services

3PL Ecommerce Platform Integration

Seamless integration with eCommerce platforms is crucial for any 3PL warehouse. A robust third party logistics provider connects with platforms like Shopify, WooCommerce, Magento, and BigCommerce to ensure real-time order processing and tracking. Using warehouse management systems (WMS) and custom APIs, 3PL logistics providers enable smooth data exchange between warehouses and online stores, reducing errors and improving efficiency.

Inventory Management Support

One of the biggest advantages of working with a 3PL logistics provider is expert inventory management. Businesses no longer have to worry about stock shortages or excess inventory. 3PL warehouses use advanced tracking systems to monitor stock levels and trigger restocking when needed. Whether managing seasonal demand fluctuations or ensuring a steady supply, a third party logistics provider ensures businesses never run out of stock.

Picking, Packing, and Shipping

The order fulfilment process in a 3PL warehouse follows a structured workflow:

  • Order Placement: Customers place orders on an eCommerce store.
  • Picking: Warehouse staff selects the items from inventory.
  • Packing: Products are packed securely using cost-efficient materials.
  • Shipping: Orders are dispatched with correct labels and tracking details.

Efficient fulfilment not only reduces shipping costs but also improves delivery speed, enhancing customer satisfaction.

Freight Shipping Options: FTL and LTL

A reliable third party logistics provider offers multiple freight options to optimise transportation costs:

  • FTL (Full Truckload): Suitable for large shipments requiring an entire truck.
  • LTL (Less Than Truckload): Cost-effective for smaller shipments, allowing multiple businesses to share freight space.

Some 3PL logistics providers also act as freight brokers, helping businesses negotiate better shipping rates and optimise delivery routes.

Kitting and Bundling Services

Kitting services provided by 3PL logistics providers allow businesses to bundle multiple products together before shipping. This is useful for:

  • Subscription boxes (e.g., monthly curated product shipments).
  • Gift sets and promotional bundles.
  • Customised product packaging for enhanced branding.

By handling kitting in-house, third party logistics providers ensure efficiency and accuracy in bundled shipments.

Reverse Logistics: Handling Returns Efficiently

Returns are an inevitable part of eCommerce, and an efficient third party logistics provider ensures smooth handling of returned products. 3PL warehouses inspect, process, and restock returned items while minimising losses due to damages or fulfilment errors. A well-structured reverse logistics process enhances customer trust and improves retention.

Same-Day Shipping: Faster Fulfilment for Customers

Speed is a critical factor in today’s competitive market, and many 3PL logistics providers offer same-day shipping services. Orders placed before a specific cut-off time are picked, packed, and shipped the same day, ensuring quick deliveries. This level of efficiency enhances customer satisfaction and boosts sales for businesses.

Industry-Specific 3PL Services for Specialised Logistics

Not all third party logistics providers offer the same services. Some 3PL logistics companies specialise in handling specific products that require compliance with regulations or special storage conditions. Whether it’s pharmaceuticals, electronics, or oversized goods, a 3PL warehouse ensures proper handling, storage, and delivery.

  • Cold Chain Logistics
    For perishable goods like food, pharmaceuticals, and cosmetics, third party logistics providers offer temperature-controlled storage and transportation. Refrigerated warehouses and reefer trucks ensure that sensitive products remain fresh and meet regulatory standards.
  • Hazardous Material Handling
    Certain products, such as batteries, perfumes, and chemicals, require careful handling due to safety risks. A specialised 3PL logistics provider ensures compliance with safety regulations and holds necessary certifications to manage hazardous materials securely.
  • Large and Bulky Item Logistics
    Heavy and oversized items like furniture, home appliances, and gym equipment require specialised storage and transportation. A third party logistics provider optimises shipping strategies to reduce excessive freight costs, ensuring smooth and cost-effective delivery.

3PL Services vs. Drop Shipping – What’s the Difference?

Both third party logistics and dropshipping are fulfilment models used by eCommerce businesses, but they operate differently. Here’s a quick comparison:

Feature3PL LogisticsDrop Shipping
Inventory OwnershipBusinesses own inventorySupplier owns and stores inventory
WarehousingStored in a 3PL warehouseNo storage required for sellers
ShippingHandled by the third party logistics providerSupplier ships directly to customers
CustomisationOffers branding, kitting, and packaging optionsLimited customisation available
Cost EfficiencyReduces storage & shipping costs for bulk ordersHigher per-unit costs due to supplier fees

While dropshipping is great for businesses wanting a low-risk model, 3PL logistics is ideal for those looking for scalable, long-term fulfilment solutions.

Surface Movement Solutions

At LP Logiscience, our land transport solutions offer a vast network of products and services to help our clients achieve a competitive edge. Our top-notch land shipping solutions ensure that your shipments are delivered reliably and on time, whether it's a single parcel shipment or the management of the entire surface supply chain. Our land transport network is equipped to transport goods of any kind to any location, with a track record of delivering millions of successful ground shipments with quality and timeliness.

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Air Movement Solutions

In the ever-evolving world of logistics, a comprehensive solution that combines speed, agility, and dependability is critical. At LP Logiscience, we offer a range of services to meet complex logistical requirements while maintaining an optimal balance between cost and speed to market. Choose a tailor-made solution that best suits your needs to start improving the efficiency of your supply chain. Our air movement solutions enable you to transport time-sensitive, high-value cargo quickly and efficiently, bypassing any supply chain disruptions caused by congested ports, labor shortages, or limited capacity. Whether used as a standalone service or in combination with inland transport modes, warehousing, and customs services, LP Logiscience is your ideal partner.

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Multimodal Movement Solutions

Our aim is to grow with our customers on their multi-sales channel journeys across various vertical markets such as retail, electronics, and healthcare, among others. We focus on developing capabilities that will lead to more standardized solutions in a dynamic environment. Our innovative pick and pack solutions and automation tools streamline e-commerce supply chains and allow for easier handling of seasonal peaks. Collaborating with a world-class logistics provider like LP Logiscience means getting better solutions. We handle all aspects of returns, from physical returns to quality checks, repairs, and disposals, ensuring that our clients' businesses run smoothly.

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Rail Movement Solutions

Our goal is to support our clients in their e-commerce journey across different vertical markets, such as retail, electronics, and healthcare. We strive to develop standardized solutions that cater to a dynamic environment, using innovative pick and pack solutions and automation tools that streamline supply chains and handle seasonal peaks. Working with a top-tier logistics provider like LP Logiscience guarantees superior solutions. We handle all aspects of returns, including quality checks, repairs, and disposals, ensuring seamless business operations. With our LCL rail freight multimodal service, we offer regular, scheduled departures and capacities across major city centers in India, providing reliability and flexibility for our clients.

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Temperature Controlled Movement Solutions

We understand the unique needs of perishable items and collaborate with cold chain partners to ensure they arrive on time and in perfect condition. Companies that can provide quality products with a long shelf life will have an advantage as demand for fresh products grows. However, this can be a challenging task, as perishable goods are fragile and require quick transportation. Maintaining a strict cold chain throughout the entire journey is essential to preserve freshness and taste. We adhere to all regulations when shipments cross borders to ensure that the process is as seamless and quick as possible. Our perishables teams at LP Logiscience provide safe and efficient transportation for temperature-sensitive cargo to exact specifications. Whether shipping fresh fruits and vegetables by land or air, our solutions ensure that temperature-sensitive products arrive on time and in perfect condition, with optimal transit times and modes of transportation. Our deep knowledge of various perishable commodities, including local legislation, allows us to provide safe and compliant international transportation from source to table. With real-time visibility from door to door, we monitor and steer your supply chain efficiently to ensure that end consumers receive products in the best possible condition.

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Environment

LP Logiscience's triple zero commitment to environmental sustainability encompasses a zero-waste supply chain. At every stage of our procedures, we prioritise adding value for the consumer and strengthening our competitive edge. Through complete waste prevention, we have modified the way materials move through our entire production process. Our zero-waste initiatives ensure that all materials are recycled or reused, eliminating the need to send waste to water sources, landfills, or incinerators. By reducing supply chain waste, we promote making better use of resources and developing goods and services that align with sustainability principles.

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Safety

At LP Logiscience, ensuring workplace safety, protecting our personnel, and promoting their well-being are critical components of our success and future. While technology can improve safety in modern warehousing, relying solely on safety precautions is not a solution. We prioritise ensuring that all our staff adhere to safety rules and procedures, not just for their safety but for the greater good of the brands they represent and our environment.

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CSR

A common goal: to help society progress.

LP Logiscience sees itself as a logistics partner that is part of a larger picture connecting people and communities worldwide. Giving back to the world and being a part of something bigger is central to our values. We work towards sustainable logistics to have a positive impact on the world around us. By transitioning to a zero-carbon business model and guiding our customers towards a zero-carbon future, we hope to make a difference for people living tomorrow. Our commitment to bringing about social progress has been constant since 1919, and we remain dedicated to this goal as the world around us evolves.

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