3PL
What is a 3PL (third-party logistics)?
A 3PL, third-party logistics provider, is an outside company that runs part of a shipper's logistics under contract: transportation, warehousing, fulfillment, or a combination. A shipper that does not want to own trucks, warehouse space or a logistics department buys that capacity and know-how instead, and pays per service, per order or per stored unit against a rate card.
The three common shapes
- Transportation 3PLs: freight brokerage and carrier capacity, moving goods but holding little or no warehouse space.
- Warehouse and fulfillment 3PLs: they hold inventory, pick and pack orders, and bill for storage plus handling.
- Freight forwarders: they arrange international moves, combining carriers, customs and documentation.
How a 3PL makes money
Storage billed per pallet or cubic foot, handling billed per movement or per order, freight marked up or commissioned, and value-added services (labeling, kitting, inspections) billed at a rate card. The interesting number for a shipper is how much of the bill is rate card and how much is judgment: work priced per event should be visible per event, or the invoice cannot be checked against the floor.
Whether you run a 3PL or hire one, the questions are the same: what is billed, from which record, and how fast can the customer see it.