Third-party logistics (also known as 3PL or TPL) is a system in which a company (the third party) offers inventory management and delivery services to another company. Inbound and outbound transportation, as well as warehousing, are all handled by third-party logistics companies for their clients. Furthermore, this logistics solution covers the full product lifetime. A 3PL firm transfers products from a local or international manufacturer/supplier to their final destination. Third-party logistics providers handle inventory management, inventory storage, packaging/warehousing, freight forwarding, customs clearance and declaration, shipping and distribution, and additional services (depending on the contract). A 3PL business is generally used by a company (client) that does not have its own logistics department. In exchange, the 3PL handles some or all of the company's logistical needs.
Third-party logistics is an application of logistics in supply chain management and logistics in which a company uses third-party logistic services to outsource supply, warehousing, and fulfillment services. The raw materials, equipment, labor, and other resources required after the completion of a product or process are all part of the supply chain. The distribution chain, on the other hand, refers to the means of transportation utilized to convey the finished product or raw materials to the area where they are needed, such as trucks, train, air, sea, and other modes of transportation. The supply chain's components can be broken down even further. They include the production facility, its location, the items that are made there, the means by which the products are conveyed to the ultimate consumer's location, and the distribution channels through which the finished products are dispersed.
These components make up the supply chain structure, which must function effectively in order for a firm to be successful. Third-party logistics businesses provide their clients a flexible transportation and warehousing alternative in a supply chain management and logistics environment. Companies may focus their financial and human resources on areas where development and expansion are most important by outsourcing these activities. This type of arrangement between transportation and warehousing providers and their clients frequently provides a service-based, off-site, remote-facilities-based model that allows logistics providers to meet their clients' needs even if they do not have the space, staff, or other resources to maintain a full-time in-house presence.
Source: https://www.openpr.com/news/1214528/third-party-logistics-market-global-industry-insights-trends-outlook-and-opportunity-analysis-2016-2024.html
