You might have heard the term third party logistics or 3pl in Australia mentioned in the past, and wondered what it is and how it can help your business. If you’d like to know more about it’s purpose and benefits, read on below.
What is it?
Basically, third party logistics is a broad term relating to companies that offer outsourcing solutions for logistics services. They usually provide a range of services which can include anything from a focus on a single area such a shipping, to large operations that cover the entire supply chain process from procurement to fulfillment and final shipment.
How does it work?
A common scenario with outsourced logistics might involve for example a toy store, with online ordering available. The brick and mortar store might keep some stock on the shelves and look after the hiring of staff and internal running of the business, but doesn’t have the space or capacity to manage and fulfill the large volume of online orders that it receives. Outsourcing to fulfillment centre and a shipping company means that the store is not responsible for fulfillment and frees staff up to manage other areas of the business.
Why do we need it?
The rise of online businesses and increasingly complex supply chain needs mean that logistics companies are increasingly essential. 3pl in Australia is a fast growing industry, especially with our vast cross-country distances and expanding businesses. Outsourcing allows small businesses to continue to operate, because whilst they cannot justify the cost of a warehouse they can afford to outsource.
3pl Australian networks are important to the overall supply chain and allow businesses to focus on their core areas and continue to grow. Without outsourced logistics options available, many businesses would have to close up shop as they would not be able to afford to continue running.
Common offerings of third party logistics companies
Third party logistics companies are mix and match and offer solutions to suit all needs. Many businesses may only need a few areas of the supply chain to be outsourced. Common tasks outsourced to 3pl Australian companies include;
Container receipt and de-packing
This involves receipt of shipping containers full of items, unpacking and quality checking and is a common need for businesses that do not have warehouse space to store ordered stock.
Cross-docking
This involves sending goods directly from the manufacturer to the customer. It is usually more cost effective than storing items in a warehouse.
Inventory management
This involves monitoring stock, usually with sophisticated technology to advise you of order quantities, trends and when stock is running low. They can even manage the stock ordering.
Order management
As mentioned, 3pl Australian companies can manage your ordering. This can be automated and can save your business considerable time and money.
Freight and distribution
A common need for local businesses from their 3pl Australian provider is freight solutions. This service can often be bundled with other services, such as storage and inventory monitoring.
The benefits of using 3pl in Australia
The primary benefits offered by third party logistics suppliers is the potential cost and time savings and the performance gains.
Significant cost savings can be made by outsourcing through 3pl Australian companies as they have economies of scale and can negotiate good freight and warehousing rates.
They’re also far more efficient then the average small business could ever be when it comes to logistics, and can often provide guarantee’s on freight and distribution timings. Order fill rates go up when outsourcing and significant time is freed up to focus on other areas of your business, improving performance.
