Third party logistics

3PLs: Third Party Logistics Providers 📦

The development of 3PLs

One of the outstanding achievements of the logistics industry in the 1990s was the widespread emergence of Third-party Logistics Service Providers (3PLs), which outsourced operations outside of a company's core business (Outsourcing), which is always considered as a hallmark of modern, efficient supply chain management.

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Third-party logistics has grown significantly in the United States over the past 10 years, with the United States 3PLs business growing 40% annually in 1997 and 15% in 1998, from $34.2 billion in 1997 to $39.6 billion in 1998.

Although 3PLs are seen as a new industry, integrating old industries such as transportation, warehousing, and packaging on the basis of information technology to provide a wide range of integrated services to other industries, in Europe, 3PLs is not a new concept.

Outsourcing as a business operation has been around for hundreds of years in Europe. Many well-known logistics companies, such as Schenker, Kuehne & Nagle, and Danzas, date back to the Middle Ages when they offered integrated services such as warehousing, transport, and customs brokerage. They still provide logistics services to the major European manufacturers, distributors, and wholesalers. The real rise of outsourcing started in the late 80s and early 90s, before the economic integration of Europe.

Until the late 1980s, the new European Distribution Centers (EDCs) built by American companies were operating on their own, but these companies found the need for more flexibility and different types of services to meet the needs of the new EU and they started to turn to outsource. As a result, the number of EDCs managed by third parties increased dramatically in the 1990s.

DocShipper Advice: Currently, the market share of 3PLs as a proportion of logistics costs varies around the world. In the United Kingdom, the proportion is as high as 35%; in the European Union, $129 billion of the logistics services market of $31 billion subcontracted to third-party logistics companies, about 25%; and in the United States, the ratio is less than 10%. According to UPS Global Logistics Services predicted that in Europe, the market share of third-party logistics companies in 2002 will reach 28%.

Why is 3PLs on the rise?

Research by the Outsourcing Institute in New York shows that 35% of 3PLs' chief executive officers (CEOs) cite the primary reason for outsourcing as reducing operating costs, another 30% cite outsourcing to avoid investing in assets for non-core operations and activities, and only 17% cite outsourcing to improve service. Overall, there are several reasons why more and more companies are outsourcing their logistics operations to 3PLs:

statistic of 3PLs worldwide

Docshipper Tip: The cost of outsourcing apparently varies in different regions, remember to check the details among each area. If you have any questions remember to contact us!

What are the basic characteristics of the 3PLs?

Note DocShipper: When choosing the corporation to form an alliance relationship, please check all the information and background to avoid scams and unnecessary costs. Contact a professional consultancy if you are a newcomer in this industry.

The merits and demerits of 3PLs

DocShipper Advice: If your company needed a 3PL help, try to contact with a professional and stable agency like Docshipper.

What are the future prospects of 3PLS?

The development of 3PLs in future is very broad, and its business expansion will mainly come from the following areas of demand:

How do 3PLs develop from the traditional industries?

At present, the world's third-party logistics enterprises are facing a period of rapid development, all kinds of enterprises of different backgrounds have transformed logistics or third-party logistics as a new growth point. It can be seen through the practice at home and abroad, third-party logistics enterprises are generally from the traditional development of logistics-related enterprises, such as warehousing, transportation, and so on.

The strategies of 3PLs

Enterprises should make strategic choices and strategic adjustments in cost control, business development, rational competition and other aspects.

What is the best choice when choosing one to collaborate?

When it comes to the choice of the 3PLs, as we mentioned that we will encounter a lot of predicaments since we can't guarantee the service quality and reliability of them, we should be careful about every aspect. DocShipper has launched a 3PL department to complete its supply chain offering. Indeed, we manage your entire process in case you are a newcomer in this industry. Supply: Supplier search, product negotiation and production follow-up (in Asia), Quality control: Inspection of the products to ensure that the quality is in line with your expectations, we also check the packing if necessary. Compliance: Verification of the various directives and licenses required during customs clearance and distribution. International logistics: Our forwarding department manages the chartering of your products (packaging, storage, sea/air freight, customs clearance). 3PL Solution: Our warehouse in Northern Italy (Camporosso) allows us to distribute your products at unbeatable prices! (Special E-Commerce). By managing the entire logistic part for you, you can take care of the marketing and sales. Your concerns become ours, serving your benefit. Know more information.

If you are not familiar with this industry, don't worry. Here, concerning every phase in the whole procurement process,

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