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What are 3PL services?
You may be aware that logistics is a major element in supply chain management and businesses need to set up a system that takes care of its logistics needs in a streamlined manner. Many organisations instead of using their own fulfilment services, outsource them to third-party logistics providers or to 3PL services. 3PL refers to services that offer supply chain and logistics operations such as warehousing, packaging, transportation, and order fulfillment to businesses. Depending on scale, a 3PL logistics service could be a single provider covering only transportation or can be a systemwide package of services encompassing the entire 3PL supply chain management.
Additionally, 3PL warehouses handle inventory of multiple businesses in addition of their own. Such 3PL service providers are called hybrid 3PL. It may be noted that private warehouses, usually owned by manufacturers or retailers, catering to the fulfilment of their own products are not considered as 3PLs. 3PL services offered also include other value-added services like inventory management, procurement, postponement packaging and others.
• Cost saving • Capacity
• Risk management
• Technologically advanced
• Operational control
• Saves time
What is the difference between 3PL and 4PL?
The Indian logistics sector is vast. It covers global players, small local players, courier services, and more. In order to cater to the diverse needs of the sector, logistics service providers often offer value-added services to support the over logistics and supply chain flow.
Let us understand the meaning of 3PL and 4PL service providers. We have already discussed above in detail what a 3PL service is. On the other hand, a 4PL provider manages all aspects of the supply chain including elements of IT, procurement, and finance. A 4PL generally outsources the managing of physical goods to one or more 3PLs.
The basic difference between 3PL and 4PL service providers lies in the fact that 3PL provider focusses on the day-to-day operations of supply chain logistics while a 4PL focusses on optimising your entire supply chain. Therefore, a 4PL controls your entire logistics operation and gives you the bandwidth to focus on your business expansion. Moreover, a 4PL acts as the single point of contact in your supply chain management, whereas 3PL only takes care of specific aspects of the same.
What are the four types of 3PL services?
3PL services has evolved over the years and there has been transformational changes with the rise of eCommerce, especially with the addition of last-mile delivery logistics and reverse logistics for eCommerce. Depending on the type of logistics services required, 3PL can be divided into four common types – you can choose the type to suit the needs of your individual business. Below are the types of third-party logistics:
1. Standard 3PL providers
As the word ‘standard’ suggests, this type of 3PL service is the most common logistics services available to pick and pack your goods. Standard 3PL providers performs basic logistics function. It provides a small range of services to companies with particular needs and do not offer any innovative approach to logistics functions. A standard 3PL provider usually offers warehouse and logistics services at a comparatively lower rate mainly because their services are basic. If you are an eCommerce retailer and require only basic logistics support, you can avail the service of a standard 3PL company.
2. 3PL service developer
In addition to standard 3PL services, 3PL service developer also offers IT infrastructure and management enabling you to track and trace where your goods are using their system. Service developers 3PL is built on a strong IT infrastructure and offer many value-added services such as tracking, cross docking, and specific packing. Owing to these additional infrastructure and expertise customers can enjoy safety and reliability of their products.
It may however be noted that service developers do not offer an all-inclusive, tailored transportation management solutions. In case you want to ensure that your products like raw materials, finished products, and perishable items are safe and sound, you can avail the 3PL service developer 3PL service.
It may be noted that some third-party logistics may also offer package selection and cross decking. Let us understand the difference between the two: While package selection allows clients to choose which packaging to use cross docking enables clients to transfer an item from one truck to another with no requirement for storage.
3. 3PL customer adapters
This type of 3PL company is comprehensive in nature and handles all end-to-end logistics activities for clients inclusive of managing the shipping process, providing rate maintenance and negotiation with carriers. It is a wiser choice for clients as compared to standard 3PL as customer adapters exert total control over your logistics activities for a complete shipping management.
Customer adapter 3PL helps in running the entire logistics on behalf of the hiring company. Therefore, this type of 3PL service do not create its own operation as it inherits the logistical operation from the hiring company. In terms of expenses, customer adapters are expensive compared to the standard one as it involves heavy personnel involvement in the logistics function. If you want to avail 3PL customer adapters, you will be provided access to technology like transportation management system. This will help you to gain visibility into the processes and enable you to customise shipments as required.
4. 3PL customer developers
Customer developers is mostly used by large companies, and it offers a comprehensive and specialised innovative logistics solutions. Customer developers exerts complete control of the logistic functions for the company and builds up an integration with the company for streamline, support and to develop new logistics solutions. This type of 3PL also takes over the logistics of the hiring company.
But, unlike customer adapter, 3PL customer developers integrates itself with the hiring business. Using a 3PL customer developer is quite expensive as it involves heavy amount of work, personnel, and responsibility to take care of all logistics operations for the client.
Who are the major 3PL services companies in India?
- Fulfillment: Shiprocket Fulfillment is a reputed third-party logistics (3PL) service provider designed to store, handle, pack, and transport orders. Equipped with fulfillment centres in Bengaluru, Delhi, Gurugram, Kolkata, Mumbai and other cities, it delivers orders across 24000+ pin codes supported by a distribution network of 17+ top courier partners.
- Businesses use Stockarea’s cloud platform to set up their remote inventory base at any of their network warehouses. It offers warehouse, shipping, fulfillment, and customs clearance, full-on-demand warehousing and logistics services.
- Jayem Warehousing Pvt. Ltd.: With over 25 years of experience in contract logistics, this service provider offers an end-to-end logistics services including warehousing, distribution, logistics, fulfillment, first mile, long haul, express, last mile, and packaging services in 30 cities in India.
- Logistics: Allcargo Logistics Ltd. offers international multimodal transport pan-India and is into e-commerce logistics, ship ownership, and contract logistics, among other services. It has a worldwide network covering 164 countries across 301 offices.
- Access Warehousing: Providers of best-in-class services across an integrated global network, Access Warehousing focusses on general business and the specialised needs of the automotive, consumer & retail, oil, healthcare, industrial & aerospace, and technology sectors.
If you are looking for a inter/intracity logistics service provider for your business, consider nexLogistics from Tata nexarc – an online platform to find relevant logistics providers in one place. You can compare rates, get door-to-door pickup and delivery service, and get road transportation services across 19000+ PIN codes in India. Supported by the best logistics partners like Delhivery, Gati, Rivigo and V-xpress, nexLogistics is equipped to bring businesses and logistics partners together on one platform where you can explore services, compare prices, and work with a logistics partner of your choice.
Summing it up: How to choose the best 3PL service
As an MSME, you need to make a careful selection of the best 3PL partner for your business based on technological sophistication, customer service, stability, safety, customisation, omnichannel competence, etc. A right decision will enable you to serve your consumers better and provide you with time to focus on other functions of your business.
It is recommended to collaborate with 2-3 different third-party logistics partners. This will give you the option to have backups and identify partners who offer efficient services. Alternatively, you can explore logistics services on Tata nexarc’ nexLogistics. You can find doorstep pick-up and delivery services offered by trusted partners for your logistics needs.