Glossary for Industry Terms

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Third Party Logistics – 3PL

What does 3PL mean?

Third Party Logistics (3PL) is the use of a contracted services company who specializes in the picking, packing and dispatch of goods.

3PLs are often used by companies that have little or no space to keep their product stock or companies looking to test their products out in new or international markets.

Third party logistics companies will often centrally manage a warehouse with stock for a number of brands and companies. When brands or companies get sales, they will send the shipping information to the 3PL service who will take care of the fulfilment and distribution of these sales.

While most 3PL companies will simply pick, pack and ship orders, there is an increasing trend for these companies to take on customer service duties for a higher fee.

Ecommerce integration with 3PL companies is also becoming more common to streamline the fulfilment process and satisfy customer needs by decreasing fulfilment times.

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