Third-party logistics (3PL)
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is third-party logistics (3PL)?
A third-party logistics (3PL) provider is a company hired to handle some or all of another company’s warehousing, order fulfillment and shipping. Distributors use 3PLs to add warehouse space or reach a new region without opening and staffing a building of their own.
Third-party logistics (3PL) example
To serve a new customer on the West Coast, where it has no warehouse, a distributor stocks 300 items at a 3PL’s facility nearby. The 3PL picks, packs and ships whatever orders the distributor sends it.
Related terms
- Distribution center (DC)A distribution center (DC) is a large warehouse where a distributor receives bulk deliveries, stores them and ships orders to customers or its branches.
- Warehouse management system (WMS)A warehouse management system (WMS) is software that directs and tracks the work inside a warehouse, from receiving and putaway to picking and shipping.
- Drop shipmentA drop shipment is an order the distributor sells but has the manufacturer ship straight to the customer, so the goods never pass through its warehouse.
- Pick, pack and shipPick, pack and ship are the three warehouse steps that turn a sales order into a delivery, from pulling items off the shelf to handing them to a carrier.
