Those who are not familiar with shipping and warehousing probably will not understand what 3pl warehouses are or even what 3pl stands for. This is a term used to denote third party logistics. Therefore a 3pl warehouse is a warehouse which is run by a third party which the company which is the client company has outsourced it to.
In this scenario of the 3pl warehousing, the provider of third party warehouse and logistics which will provide the client company or companies with various functions relating to warehousing and logistics. There are different terms and conditions as well as functions which these 3pl warehousing companies fulfill. The functions are not limited to or just encompass warehousing of the products but also it could extend to fulfilling the orders and freight forwarding.
- When there are 3pl warehousing companies which are involved, it allows the companies which are the client companies to only focus on the manufacturing of the product, marketing the product or goods as well as selling of the product and goods. The elements of logistics with regard to warehousing can then be outsourced to these 3pl warehousing companies.
- Also this saves the client company a lot of money as the 3pl warehousing company is the one which has all the various resources and the trained manpower to take care of the logistics. These 3pl warehousing companies also come with a great deal of supply chain expertise and of the products in the supply chain. They also share responsibility with the client company for managing various supply chains on a global basis and they keep the stores as well as customers stocked at all times. They deliver the orders perfectly every single time.
- This adds to the customer satisfaction of the parent client company and they earn brownie points even though they are not the ones who are doing the hardwork or are the ones who are investing their time, energy or resources in ensuring the safe and punctual delivery of the goods.
- These 3pl warehousing companies are also able to reengineer the distribution networks so that the global market supply can be maintained and they can then get a better coverage.
- The 3pl warehousing companies also track the s k u of each and also provide a detailed report of where each of the places the pieces are, when there is new stock which has arrived and how much has arrived. That helps the client company to plan better with regards their production, their distribution and supply.
- The knowledge of this also helps the parent company always to be in the know how of exactly how much of their products and goods are in various stages of transit or have reached the destination, the movement and the spread of their goods and products.
As the manufacturing or client company is not into warehousing or logistics as their primary focus, these 3pl warehousing companies provide the expertise at a cheaper cost than if the client company had to do it themselves.