Most businesspeople know that a third-party logistics (3PL) company provides outsourced logistics services for all or part of a business’s supply chain. These functions include public warehousing, distribution, order fulfillment, transportation management, and any other services needed to move goods to where they need to go.
But did you know that there are four different types of 3PL providers? Knowing the differences between each one will help you select the best one for your business.
First, let’s start off with the official definition of what a third-party logistics company is.
Federal legislation passed in 2008 legally defines a 3PL as “a person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”
This guide explains the different types of 3PLs and the services they can provide your company based on its logistics requirements.
Standard 3PL Provider
A standard 3PL handles basic logistics services. These are defined as public warehousing of your goods, picking and packing them, and distribution.
Standard providers perform a small range of logistics services and typically offer them at a low rate.
However, logistics is not a core function with these types of 3PLs. Therefore, they are not the best solution for businesses looking to partner with a logistics provider who can offer comprehensive services or cost-saving solutions.
Service Development 3PL Company
A service development 3PL has an enhanced infrastructure, advanced automated equipment, and warehouse management technology to provide a greater range of services than a standard 3PL.
The warehousing facilities are designed to safely and securely store all types of goods, including raw materials, finished products, food products, and refrigerated goods.
This type of 3PL firm has the technology in place to perform all sorts of business functions related to supply chain management.
In addition to basic logistics services, other functions include a wide range of processing services, such as custom packing, assembly work, inspection, bulk mailing, folding, bundling, labeling, advertising kit preparation, stretch wrapping, etc.
Other services offered include contract trucking, import and export, packing services, and more. Additionally, service development 3PLs offer value-added services to meet the customized needs of their clients. These may include specific packing requirements, cross docking, and tracking.
However, businesses looking for even greater logistics services and solutions, or customized transportation management may not be the best fit for these types of providers.
Customer Adapter 3PL Business
A customer adapter 3PL completely manages all of a company’s logistics activities. In other words, a business has the 3PL take over its total logistics operation and the 3PL uses its existing infrastructure and technology to perform the functions.
Although the cost is higher, the services are comprehensive for handling the supply chain from beginning to end.
Among the vast array of services provided are procurement, warehousing, distribution, order fulfillment, order processing, shipping management, transportation management, tracking and tracing, cross-docking, customized functions, and much more.
Customer Developer 3PL Provider
A customer developer 3PL provides the most comprehensive oversight of a company’s supply chain functions. Usually, the 3PL integrates itself into the company and evaluates current processes to identify opportunities to enhance effectiveness and efficiencies.
This type of logistics provider has complete control to change the current supply chain process or add new specialized logistics solutions to it.
Businesses using these types of logistics providers also can expect comprehensive reporting. Regular data and matrix reports are generated that supply information on freight data, inventory management, cost accounting and control, etc.
However, businesses must be willing and comfortable with giving over complete control of their logistics operations to a customer developer 3PL.
About Brendamour Warehousing
Brendamour Warehousing, Distribution & Services is a public warehouse that offers 3PL services. We are a service development 3PL company whose functions also cross over to the customer adapter type of third-party logistics providers.
At Brendamour, we offer comprehensive logistics services, as well as customized services and solutions.
Consider us your partner in finding innovative solutions to your logistics needs. Contact Brendamour to learn more about the warehousing, distribution, logistics, and other services we offer to meet the needs of your business.