Simply put, a 3PL warehouse means a 3rd Party Logistics Warehouse.
When your company wants to sell products in a new city or country, you can outsource the warehousing and last mile deliveries to a 3PL warehouse.
Your company sends a pallet load of products – and the 3PL warehouse stores their products, packages them and delivers to their customers.
It makes good sense – instead of sending out parcels individually from your Home City to a New City – you deliver a pallet load of stock to a 3PL warehouse in the New City – and the 3PL will pack and deliver to customers that live near New City.
This gives you a logistics advantage, as you short-cut delivery times and cost in the last mile.
In this guide, we’ll discuss:
- What is 3PL Warehousing? Plus examples.
- 3PL logistics
- Questions people often ask about 3PL Warehousing
- Why use a 3PL Warehouse when expanding to new territories?
What is 3PL Warehousing?
3PL warehousing means outsourcing your warehousing and distribution operations to a 3rd Party Logistics Provider.
Instead of owning or leasing your own warehouse:
- You use warehousing operated by a 3PL company that manages your stock
- The 3PL processes your orders from various marketplaces
- It picks, packs and delivers products to your customers.
3PL warehousing is gaining popularity because even small companies save costs by outsourcing their warehousing to a 3PL – because the costs of transport, security, labour and warehousing are shared between several independent companies.
Small, medium and big brands can remain independent and benefit from large scale discounts through a 3PL.
How Does a 3PL Warehouse Work?
Instead of shipping individual parcels from your location:
1. You send the 3PL one or more pallet loads of products
2. They store your stock in a secure warehouse
3. Paperwork / red tape is handled by the 3PL
4. They deliver straight to the customer fast,
as they're closer
5. The 3PL handles security, stock control
and inventory systems
Just as each individual shoe company in the shoe industry is completely different, so too are 3PL warehouses very different from each other.
Specialist 3PL’s provide value added services, such as kitting, or specialise in services for pharmaceutical, FMCG, or automotive products.
Choosing the cheapest 3PL, or a 3PL that’s a bad fit can cost you double
in the long run. It’s important to find a 3PL that’s a right fit for your
business to help you scale.
3PL Examples
Examples of 3PL Types:
Warehouse/Distribution-Based 3PLs
- Offer storage, order picking, packing, and distribution services.
- Example: Fulfilment centres for eCommerce brands.
Forwarder-Based 3PLs
- Specialise in organising shipments for clients, often handling international freight.
- Example: Ocean freight forwarders managing customs and documentation.
Integrated 3PL Service Providers
- Offer a combination of transportation, warehousing, and technology solutions under one roof.
- Example: 3PL companies managing end-to-end supply chains.
Examples of when a 3PL warehouse is used:
- E-commerce brands expanding to new regions without setting up their own warehouses.
- Retailers that need seasonal storage for peak demand periods.
- Global brands wanting faster delivery times by storing products closer to customers in different countries.
On the lighter side of 3PL’s, many people don’t
know what a 3PL is.
A 3PL is NOT a new robot in an upcoming Star Wars show, nor is it a “threeple” in a three-legged race.
Now that you know:
Read on to get answers to frequently asked questions about 3PL’s …
What is 3PL Logistics?
3PL logistics refers to the broader range of services a 3PL company offers – not just warehousing.
A 3PL can perform the entire logistics function, each 3PL is a specialist at dealing with logistics in their home town.
3PL Logistics Services offered by Global 3PL Network
Inbound Freight Forwarding and Customs Clearance
Our services extend across first mile by rail, sea or air, customs clearance, duty, import regulations and delivery to your Global 3PL Network partner.
Assist with Representation in each Region
The Global 3PL Network can provide advice, guidance, and assistance to help you enter new markets as well as Financial Representation to manage local tax obligations.
Warehousing and Distribution
We offer secure and strategically located warehouses to store your inventory, ensuring efficient order fulfilment and fast delivery times.
Inventory Management
Our state-of-the-art inventory management systems provide you with real-time data and insights, allowing you to optimize stock levels and reduce carrying costs.
Order Fulfilment
Our experienced team takes care of the entire order fulfilment process, from picking and packing to shipping and returns, so you can focus on core business activities.
Transportation Management
We leverage our extensive carrier network to negotiate the best rates and ensure timely deliveries, regardless of your shipment size or destination.
Order Tracking
Our extensive deep integration with transport providers provides complete transparency of where orders are at any given time in the supply chain.
Value-Added Services
We offer a wide range of value-added services, including white glove service, kitting, labelling, and assembly, to meet your specific needs.
What is a 3PL Company?
A 3PL company is a business with a warehouse that provides logistics services for other companies.
Using a 3Pl company allows brands to focus on the core business – while leaving warehousing, fulfilment, and delivery to logistics experts.
Questions people often ask about 3PL Warehousing
1. Is 3PL warehousing suitable for my (specialist) products?
Yes – our 3PLs are run by a network of independent owner-led businesses who are specialised in different areas, e.g. pharmaceutical regulations, fashion brands, the automotive industry.
Discuss your special requirements with us and we will match you with the right 3PL warehouse.
2. Will my customers know I use a 3PL?
No – the 3PL operates behind the scenes, shipping under your brand’s name and packaging.
3. Can the 3PL label packages with my brand?
Yes, many of our 3PL’s can.
4. Can I use multiple 3PL warehouses in different cities?
Absolutely. This is called a multi-node fulfilment strategy and can significantly reduce delivery times.
5. How do I choose the right 3PL company?
Through our global network, we’ve helped brands, such as Birkenstock, Samsung and Smith & Nephew find 3PL’s that match their needs.
You can contact our team to discuss your company’s needs here. We will help you find the right match for your brand.
6. What is 3PL vs 4PL?
- 3PL (Third-Party Logistics)
A company that handles physical logistics operations like warehousing, order fulfilment, and transport. - 4PL (Fourth-Party Logistics)
Manage the entire supply chain, often coordinating multiple 3PLs, carriers, and suppliers.
7. Why use a network of 3PL’s?
A network allows you to access 3PL’s with local knowledge in multiple cities.
As your business expands to new areas, we match you with trusted 3PL partners that are best suited to your business.
Find out more about how using multi-location 3PL’s works here
In summary, why use a 3PL Warehouse when expanding to new territories?
When entering a new market, setting up your own warehouse is costly and it can take months to set up the staff and warehousing.
More and more brands are outsourcing their logistics to a 3PL warehouse and gaining logistics advantages – because they don’t have the heavy costs of running their own warehousing and distribution facilities in multiple locations.
5 major benefits of using a 3PL warehouse:
- Local Expertise – Skip the red tape – benefit from knowledge of local regulations and carriers.
- Speed to market – Start sending orders as soon as your first pallet load of products arrive at the 3PL warehouse.
- Agility – The 3PL is better positioned to handle spikes in demand.
- Cost Efficiency – Avoid fixed facility costs by paying only for the space and services you use.
- Happier Customers – deliveries are much faster when they are shipped from a nearby warehouse, rather than another city
Find the right 3PL warehouse for your brand
Find out more about fulfilment services that 3PL’s offer here.
Or, ask us any question you may have about using a 3PL here