Third-party logistics (3PL) is a partner or service that assists manufacturers, especially e-commerce merchants, to outsource activities related to logistics and distribution. A third-party logistics company provides specialized services such as inventory management, cross-docking, door-to-door delivery, and packaging of products. This, in turn, aids enterprises in providing a better customer experience, ensuring scalability, mitigating the risks of product damages, promoting business growth and market expansion, and enabling the completion of core business operations.
As of 2021, the global third-party logistics (3PL) market has a value of $1.3 trillion. It is projected to grow at a CAGR of 8.8% from 2022 to 2031, with an estimated market size of $2.8 trillion by 2031. This indicates a significant potential for growth in the future.
Benefits of 3PLs
There are many benefits to using 3PLs, including:
- Cost savings: 3PLs can help businesses save money on logistics costs by negotiating better rates with carriers and optimizing freight routes.
- Scalability: 3PLs can help businesses scale their logistics operations up or down as needed, without having to invest in their own infrastructure and resources.
- Expertise: 3PLs have the expertise and experience to manage complex logistics operations, freeing up businesses to focus on their core competencies.
- Flexibility: 3PLs offer a wide range of services, so businesses can choose the ones that best meet their needs.
- Reliability: 3PLs have a vested interest in ensuring that their clients’ shipments are delivered on time and in good condition.
Third-party logistics (3PL) is a partner or service that assists manufacturers, especially e-commerce merchants, to outsource activities related to logistics and distribution
Importance of 3PLs in the Logistics Industry
3PLs play an increasingly important role in the logistics industry. They are helping businesses to meet the growing demands of e-commerce, omnichannel fulfillment, and global supply chains.
E-commerce
E-commerce has grown rapidly in recent years, and so has the demand for 3PL services. E-commerce businesses rely on 3PLs to fulfill orders quickly and accurately and to deliver products to customers in a timely manner.
Omnichannel fulfillment
Omnichannel fulfillment is the process of fulfilling orders from a variety of channels, such as online, in-store, and mobile. 3PLs can help businesses manage omnichannel fulfillment by providing a centralized logistics platform.
Global supply chains
Global supply chains are becoming increasingly complex, and 3PLs can help businesses manage them efficiently. 3PLs have the expertise and experience to handle international shipments, including customs clearance and documentation.
Some of the key players in the 3PL industry include:
- Coche Ride
- A.P. Moller – Maersk
- C.H. Robinson Worldwide, Inc.
- DB Schenker
- DHL International GmbH
- DSV
- FedEx Corporation
- GEODIS
- Kuehne+Nagel Inc.
- UPS
- XPO Logistics Inc.
The rise of 3PLs is a significant trend in the logistics industry as they help businesses save money, scale their operations, and meet the demands of e-commerce, omnichannel fulfillment, and global supply chains.
With the challenges logistics face in Nigeria it is a miracle there’re still platforms like Coche Ride are still standing