What Is 3PL in the Trucking and Freight Industry?

There are a lot of moving parts in the transportation and logistics industry, and Third-Party Logistics (3PL) providers can help streamline operations. Third-Party Logistics providers are outsourced partners and intermediaries that manage key aspects of transportation and freight operations. Individuals new to the industry may want to know what a 3PL in the trucking and freight industry is, and TransPlus can help answer your questions and provide information about how 3PLs can benefit a business when paired with the capabilities of a Transportation Management System (TMS).

What Are the Key Services Provided by 3PLs?

A 3PL is a third-party provider of outsourced logistics services and solutions that can include anything from a single stage of the supply chain to the entire operation. In the trucking and freight industry — 3PLs act as a critical link between shippers who have cargo to move and carriers who have the ability to move the cargo. More than a simple middleman, a modern 3PL provides a comprehensive suite of services and solutions — including transportation, storage, and data analysis — to help optimize the flow of goods and reduce costs for clients.

Freight Brokering

3PLs partner with vast networks of freight carriers to find the best rates and equipment for their clients. They specialize in coordinating both Less-Than-Truckload (LTL) shipments for smaller loads and Full Truckload (FTL) shipments for high-volume needs. This ensures that every load is matched with the right asset.

Warehousing and Distribution

Many 3PLs provide physical space to store inventory — allowing businesses to scale their footprint without investing in physical real estate or warehouses. These third-party warehouse facilities handle everything from receiving and picking-and-packing cargo to managing returns and final-mile distribution.

Logistics Management

This third-party service involves the high-level oversight of the supply chain from end to end, including freight auditing, processing of payments, and claims management. By handling the administrative heavy lifting for freight companies, 3PL providers allow shippers to focus on product development and sales.

Technology and Analytics

Leading 3PLs provide advanced digital tools that provide increased visibility into the supply chain. Through data-driven insights, 3PL providers can help businesses identify bottlenecks, predict seasonal shifts, and analyze their costs and expenses to make more informed financial decisions.

What Are the Benefits of 3PL Providers?

Working with a 3PL provider offers much more than just a helping hand — it provides a competitive edge for companies based primarily on scalability and resource optimization. By tapping into a 3PL’s established relationships and investing in solutions, freight companies can achieve shipping rates and a level of service that would be impossible to secure on their own.

• Scalability: Partnering with 3PL providers allows freight companies to easily ramp up or down during peak seasons without the risk of having underutilized assets or empty warehouses.
• Cost Savings: A 3PL can help reduce capital expenses on equipment, technology, and staff by implementing the already established and existing infrastructure of a third party. 
• Expertise: Your company gains access to specialized knowledge regarding international regulations, customs, and industry-specific shipping requirements.
• Improved Customer Experience: Faster delivery times and better tracking provided by 3PL can lead to higher satisfaction and repeat business from your customers.

READ MORE: Top 5 KPIs for Trucking and Transportation Companies

It is important to understand the role of 3PLs in the trucking and freight industry and how they can help a business that wants to grow in a competitive market. Whether you are a shipper looking to outsource your logistics or a carrier looking to partner with a freight broker, the right technology and the right partner are the glue that holds these relationships together.

Contact TransPlus today for a demo of TransPlus TMS and see how our software empowers 3PLs and carriers to improve efficiency and maximize profits!