Advantages and Disadvantages of 3PL Logistics

3PL Logistics

Many of the businesses today turn to third party logistics companies to meet customer demands! Here are the advantages and disadvantages of 3PL logistics you should know about!

 

As one business grows and delivers more products and services to more customers or in new markets, there comes a time when it must decide whether to simplify the fulfillment and shipping operations by hiring 3PL companies. Many businesses today decide to use third party logistics companies to meet customer demands.

In this article, we will present to you the advantages and disadvantages of 3PL logistics you should know about before choosing your provider:

Advantages:

One of the greatest advantages is that 3PL companies save you time by automating fulfillment and shipping. Instead of worrying about handling the shipment of the products, you will focus on ensuring your products end up in the right address in your customers’ hands. Other advantages worth mentioning are:

  • Manage internationalization: Dealing with international fulfillment is a demanding task. Outsourcing this responsibility can not only make selling globally easier but it can also lower your shipping costs and expedite time to delivery.
  • Work with the pros: The main focus of 3PL companies is to optimize the way you handle shipments. They are are experts in warehousing, fulfillment, and shipping.
  • Limit overhead: The hardest part of setting up a warehouse lies in the overhead required to rent space and hire extra people. Working with third party logistics companies can minimize your expenses.

Disadvantages:

There are numerous advantages, however, there are some drawbacks that are also worth considering:

  • Loss of control: When using a 3PL company, you are giving up your delivery control (at least a certain amount of it). The exchange or important EDI and non-EDI data can be at risk if one company is using subpart the integration software. Sharing certain information with a third party company including order information, customer information, and etc. could leave your company vulnerable if there is a data breach.
  • Costs: While third party logistics companies can save you a lot of time and money, there are some factors like over-regulation, tariffs, weather, and etc. that can increase monthly costs.

The decision whether you should hire 3PL company should be based on these pros and cons. Does it make sense for your online store? If yes, you should continue and find the right 3PL service provider.