A good 3PL helps a wide range of businesses across industries. Examples of companies that rely on the services of third-party logistics providers include:
Types of Companies That Use 3PLs
Small E-Commerce Stores
When a small e-commerce store launches, it’s usually not a problem to self-fulfill and manage orders. When that business starts to grow, however, it becomes increasingly difficult. Too much time may be spent packing orders and handling shipping and not enough time scaling the business. In addition, owners and managers often call on their friends and family to help them with their orders. It’s at this point where they start to run out of room in their homes or offices for their inventory, and they may rent a storage unit or warehouse space.
From overspending on storage costs to hiring the kid down the street to help fulfill orders, the costs start to pile up. That’s when 3PLs become a way to outsource fulfillment to spend more focus and time on product design, marketing, and other business development functions while also saving money in the long term.
Small businesses that have scaled and/or have between 15-100 employees can also benefit from partnering with a third-party logistics provider. Many 3PLs provide support to fast-growing companies as they tweak their fulfillment strategies after reaching the next level of growth.
Fortune 500 Companies
A whopping 90% of Fortune 500 companies use a 3PL. With operations that span the globe and service millions of customers, it’s no wonder these companies need the specialized, efficient services of a 3PL.
Industries That Use 3PLs
An array of fast-growing industries have found success through partnerships with third-party logistics providers, including:
The Medical Industry
Time is of the essence — and lives are on the line — when it comes to shipping critical medical sup-plies, devices, and samples. It is of the utmost importance that this precious cargo gets from point A to point B as safely and quickly as possible. Many of these items must be shipped carefully to prevent spilling or breakage. Others require careful temperature and humidity control.Third-party logistics providers have the experience necessary to ship fragile items quickly and carefully.
The Pharmaceutical Industry
The pharmaceutical industry relies on fast shipping as much as the medical industry, and products re-quire top-notch protection. Strict temperature control throughout the entire process is necessary to ship insulin and other life-saving medications that must be kept cool. Some 3PLs use trucks with advanced technology that send a notification if the temperature gets too warm or too cool.
The Construction Industry
Tons of materials are needed for construction projects. Many of them come from multiple vendors and warehouses across the country. When you choose to trust a 3PL to transport wood, flooring, and other materials to a job site, you’re ensuring things arrive on time, together, and undamaged. This helps keep construction projects on time and on budget.
The Manufacturing Industry
Downtime is deadly in the manufacturing industry. When parts or ingredients are missing, it costs time and money. 3PLs that are experienced in moving large amounts of products long distances can help manufacturers maintain a steady flow of raw materials to keep production moving. They work to keep production on schedule and on budget by making sure materials and products get from point A to point B with limited interruption, thanks to their nationwide footprints and asset networks.
Manufacturers can also save money by using 3PLs since they don’t have to manage vehicles and drivers at far-flung locations; instead, they let the 3PL handle it.
Third-party logistics providers are becoming increasingly important for the manufacturing industry as it faces a historic labor shortage. In March 2021, national manufacturing activity reached a 37-year high. At the same time, Deloitte is predicting 2.1 million unfilled manufacturing jobs by 2030. By eliminating overhead costs and reducing in-house staffing requirements, third-party logistics providers can provide relief to these companies.
Trade shows are often chaotic and involve a lot of setting up, tearing down, and product placement and showcasing. This high level of construction and coordination requires precise timing and organization to pull off — two areas in which 3PLs specialize.
It’s important to partner with a 3PL company that knows the ins and outs of the trade show scene. They can guide you through the process, so you’re free to focus on the show and landing new clients.
Cosmetics are another product that needs care and climate control during the shipping process. Cosmetics merchants prefer their products to be shipped in temperature-controlled trailers that protect them from melting, cracking, or breaking.
Expensive luxury cosmetics are also a target for thieves, making the security of the shipping pro-cess another top priority. For this reason, cosmetics companies look for long-term 3PL partnerships with personnel and truck drivers they can get to know and trust.
The Aerospace Industry
The aerospace industry is highly technical. It’s filled with extremely expensive parts and raw materials that come together through engineering and building that allow travelers to get from point A to point B as they please.
A lot of the materials used in the aerospace industry are high-value, including metals, that need to be handled properly and moved quickly. A reliable 3PL provider can help keep production moving forward without global delays that cost significant time and money.
The Hospitality Industry
The United States is home to more than 85,000 hotels. As the industry continues to grow, 3PLs play a pivotal role in helping hotels remain competitive by handling the logistics for new construction, renovations, and refurbishment projects. Logistics providers help drive successful renovation projects by coordinating all supplies, equipment, furniture, and equipment deliveries.
As a hotel orders new products for each room, the third-party logistics provider receives, stores, transports, and installs the new items as needed.
Kitting, or grouping furniture and materials together by room, is another helpful service that 3PLs provide. Kitting makes the process much more organized and efficient.
The Restaurant Industry
Restaurants need timely deliveries, so their ingredients stay fresh for delicious dishes. 3PLs work with regional suppliers to source the freshest possible ingredients and deliver them quickly to preserve their quality and flavor.
Seasonal Retail Shops
Year-round retail stores benefit from 3PL services. But the efficiency and cost-savings 3PLs provide seasonal retail stores are unmatched.
Every fall, Spirit Halloween shops pop up in abandoned storefronts around the country. They bring with them mounds of costumes, makeup, and decorations — all items that need to be stored somewhere the other ten months of the year.
Thanks to the flexibility that 3PL warehousing provides, these seasonal shops have the ability to scale up their warehousing space during the off-season and down during the times their store-fronts are open. 3PL partnerships also eliminate the need for a dedicated fleet of vehicles to trans-port the items across the nation.
In summary, a broad spectrum of businesses and industries capitalize on the advantages offered by third-party logistics (3PL) providers. These services prove essential for diverse enterprises, ranging from burgeoning e-commerce establishments grappling with scalability issues, intermediate-sized corporations fine-tuning their delivery strategies, to industry behemoths from the Fortune 500 list with expansive worldwide operations. Specific sectors with unique requirements, such as healthcare and pharmaceutical entities demanding stringent care standards and thermal management, or construction and manufacturing segments needing reliable, high-volume material transport, have all thrived through collaborations with 3PL providers. Likewise, the tradeshow sector, the cosmetics industry, the aerospace field, the hospitality industry, eateries, and seasonal retailers have all reaped the benefits of specialized services offered by 3PLs. These collaborations have facilitated businesses to retain their focus on principal operations while reaping the benefits of efficient logistics and supply chain management. Additionally, the rise of 3PLs has empowered companies to overcome market challenges, like the labor deficit in the manufacturing sector, by curtailing overhead expenditure and in-house personnel requirements. Therefore, employing 3PL services continues to be an effective and economical solution for a wide array of logistical demands, promising both efficiency and cost-effectiveness.