4 Types of 3PL Providers and How They Differ
Third-party logistics providers have been around for centuries but, only received their handy three-letter abbreviation, 3PL, sometime in the 1970s. As an eCommerce retailer, you likely are familiar with 3PLs and what they do; which is handling inventory management, warehousing, and fulfillment for other companies.
Of course, over the years, the definition of what they do has broadened. The Council for Supply Chain Management Professionals (CSCMP) even laments in their online glossary that it’s “to the point where these days, every company that offers some sort of logistics service for hire calls itself a 3PL.” So, it’s helpful to break down the different types of 3PL providers into four distinct categories.
4 Types of 3PL Companies
As logistics has grown over the years, especially with the advent of the eCommerce business model, so too have the services logistics providers offer. Today, there are four common types of 3PL service providers; the type you choose will depend on the unique needs of your individual business.
1. Standard 3PL Providers
eCommerce retailers needing only the most basic logistics would turn to a standard 3PL company. These companies offer minimal services such as storage and transportation of products. Because their services begin and end there, it’s usually a very low-cost option.
2. 3PL Service Developers
In addition to standard storage and shipping, 3PL service developers offer additional IT infrastructure and management. They provide their clients with safety and reliability value-adds such as security, shipment tracking, and compliance management.
They may also offer features such as package selection and cross-docking (unloading materials from an incoming truck and loading them directing onto an outbound truck, with little to no storage necessary).
3. 3PL Customer Adapters
This type of 3PL company handles nearly all of the logistics activities for their client, managing the shipping process from beginning to end – even providing rate maintenance and negotiation with carriers.
Clients are provided access to technology, such as a transportation management system, which provides visibility into the processes and allows them to customize shipments as needed, but can remain hands-off if they so desire.
4. 3PL Customer Developers
This type of 3PL has the fewest, but often largest, companies. That’s because 3PL customer developers completely take over a company’s logistics activities at the request of their client; they’re basically considered their clients’ logistics department. Using a 3PL customer developer is quite costly due to the heavy amount of work, personnel, and responsibility involved in “running the show” for the client.
3PL Services Through The Fulfillment Lab
While The Fulfillment Lab is generally sourced as a 3PL service developer, we don’t like to box ourselves in! We consider ourselves a customizable 3PL, working with our clients to best meet their logistics and fulfillment needs. Here are some of the services we offer:
- Customized mass-volume fulfillment
- On-demand product capabilities
- Proprietary fulfillment software
- Global shipping
- Complete order transparency
- White and private label manufacturing
- Dynamic integration with shopping carts
- Lighting fast scalability
- Fulfillment marketing