1. Overview of 3PL (3rd Party Logistics) Services Companies
A third-party logistics company is at its core an outsourcing services business that allows eCommerce businesses to shift order fulfilment responsibilities to the 3PL provider. An eCommerce company can simply receive orders from customers through their platform and leave all other duties to the 3PL (3rd party logistics) company.
A 3PL company typically handles activities that require extensive infrastructure including, inter alia:
- Warehousing solutions for the storage of goods that an eCommerce business sells.
- Generation of AWBs and packing slips.
- Supply chain management solutions to facilitate the flow of goods within the business.
- Distribution services to help eCommerce businesses to plan and control the movement of goods.
- Materials handling to ensure due care and protection of goods stored in a warehouse or moving through the supply chain.
- Delivery and collection of goods to and from online sellers.
- Shipment of orders to end-consumers and handling reverse logistics.
- Customer support service to facilitate grievance redressal and client servicing.
For eCommerce businesses that are new or operate on a modest scale, a 3PL company is an impressive solution. When using a 3PL company, the eCommerce company gets the opportunity to focus completely on the selling part of their business and can entrust all other responsibilities to be fulfilled by a 3PL partner.
2. Top 10 3PL (3rd Party Logistics) Companies for eCommerce businesses [2023 Updated List]
In this article, we discuss the top companies that offer 3PL logistics services or order fulfilment services to an eCommerce company.
ShipBob is a leading provider of eCommerce fulfilment services that started in 2014. This company operates in 220+ countries and has a fulfilment network spread across North America and Europe. The platform leverages proprietary technology developed by ShipBob to provide eCommerce businesses with easy, quick, and feasible fulfilment solutions.
ShipBob offers integrations with online storefronts including WooCommerce and Shopify as well as marketplaces such as Amazon and eBay.
- ShipBob offers all standard 3PL services including receiving, storage, packaging, and delivery of products.
- The 3PL service allows eCommerce companies to split their inventory between multiple locations and sales channels. The service also makes suggestions using an algorithm to predict the best location for product turnaround.
- This third-party logistic company offers a 2-day express shipping service for orders in select regions.
- The provider gives users access to an intuitive application for order and inventory management.
- ShipBob provides holistic reports for a better understanding of the business, fulfilment centres, and customer requirements.
FedEx is one of the largest logistics companies in the world. This company works with eCommerce businesses with large order volumes to fulfil orders. While FedEx has a large shipping network, it also has partnerships with multiple companies to offer a smooth fulfilment experience. The FedEx API offers integrations with online selling channels like Shopify and marketplaces such as Etsy and Walmart.
- FedEx offers essential 3PL services such as packaging, warehousing and storage, order fulfilment, and reverse logistics.
- The 3PL company allows businesses to manage their inventory remotely through a dedicated eCommerce platform.
- The online commerce platform of FedEx allows users to track their orders and receive detailed reports on their shipping performance.
- The service provider offers unparalleled customer service.
- The platform can be used with business tools such as QuickBooks and Xero for a seamless experience.
2.3) Red Stag
Red Stag is a third-party logistics provider headquartered in Tennessee. This company was founded in 2013 and specializes in the fulfilment of heavy items and products that require assembly before shipment. This company offers its services to the entire continental US with two warehouse locations in the central region.
Red Stag is integrated with eCommerce storefronts such as Shopify, Woocommerce, Amazon, Bigcommerce, and more.
- Red Stag boasts exceptional same-day delivery speeds with order cuts as late as 5 PM.
- The company offers a cloud-based warehouse and inventory management platform.
- The 3PL company offers optimized packaging solutions for eCommerce businesses along with design and development services.
- The third-party logistics provider also offers customized services to eCommerce companies such as refurbishment, repacking, and restocking.
Rakuten is a 3PL company founded in 2001. This company is a part of the Rakuten Group, one of the largest eCommerce companies based in Japan. This company operates 13 warehouses across the continental US, servicing almost all zip codes in the States. The provider is ideal for eCommerce businesses with high order volumes and usually works with clients who generate a minimum of 250 orders per month.
Rakuten offers integrations for both online storefronts and marketplaces including Magento, Amazon, eBay, and more.
- Rakuten offers warehousing, pickup, packaging, delivery, and reverse logistics services.
- The company offers a 2-day delivery service across the US.
- The 3PL company allows users to track orders through shipping partners which include FedEx, UPS, DHL, and USPS.
- The provider offers cloud-based monitoring software for order management.
DHL is a renowned international logistics company from Germany. Operating as a subsidiary of Deutsche Post, this company maintains a presence in more than 35 countries with worldwide servicing. This company is integrated with major selling and reselling platforms on the internet and offers services to eCommerce businesses.
- DHL offers end-to-end eCommerce logistics solutions including warehousing, shipping, order fulfilment, and more.
- The provider offers value-added services including product assembly, packaging, and direct delivery.
- The 3PL company offers fast delivery options with late cut-offs.
- The third-party logistics company offers an intuitive platform for order and inventory management with a multi-user setup.
- The 3PL service provider also offers customised logistics services based on the needs of eCommerce companies.
DCL is a third-party logistics company founded in 1982 in California. This company offers turnkey solutions to eCommerce businesses and has multiple major Silicon Valley organisations as clients. This company has several warehouses across the United States with logistics operations spanning the world.
DCL has partnered with major shipping companies such as FedEx and UPS to provide faster and more efficient logistics services.
- DCL offers third-party services that include shipping, pick and pack, delivery fulfilment, and more.
- The company offers customised logistics solutions for clients along with an Account Manager to help manage the relationship.
- The 3PL provider offers real-time business reports and analytics to help understand the business.
- The service provider offers warehousing and inventory management tools to help eCommerce businesses strategically distribute inventory across the globe.
- The logistics company offers same-day delivery services in select regions.
Shipmonk is a US-based third-party logistics company that offers personalized order fulfilment services. This company works closely with small and midsize businesses helping them grow and scale with ease. This company operates multiple warehouses across the continental US and enables faster deliveries.
Shipmonk is integrated with more than 75 online storefronts and marketplaces.
- Shipmonk offers essential services like warehousing, packaging, freight management, and returns management.
- The company offers enterprise-grade security to protect user data and privacy.
- The 3PL provider offers actionable insights through a simple dashboard for each user account to get detailed information on orders.
- The service provider offers customized packaging services to eCommerce businesses for brand development and improved customer experience.
Whitebox is an end-to-end third-party logistics provider based out of the US. This company works with higher-order volume brands operating from a small to medium scale. This provider provides fast deliveries within the US and is capable of shipping products all around the world.
Whitebox offers integrations with online storefronts that include the likes of Shopify and major marketplaces such as Walmart and Target.
- Whitebox offers services such as labelling, packaging, shipping, quality assurance, warehousing, and fulfilment.
- The company offers D2C, B2B, and drop shipping solutions to eCommerce businesses.
- The 3PL service provider offers value-added services that include kitting, lot tracking, and more.
- The provider also offers an exceptional returns management service.
- The third-party logistics company offers advanced eCommerce fulfilment software that is capable of inventory management, reporting, forecasting, bulk ordering, and integrated tracking.
2.9) Omni Logistics
Omni Logistics is a US-headquartered third-party logistics solutions provider serving globally. This company has operations in North and Central, Asia, and Europe. This 3PL provider offers air, ocean, and ground services to clients worldwide.
- Omni Logistics offers shipping, warehousing, distribution, and freight forwarding services to eCommerce businesses.
- The 3PL service offers time-critical freight globally.
- The provider offers value-added services such as small courier services, white-glove services, kitting, repacking, and special deliveries.
- The service offers custom labelling to clients.
- The third-party logistics company offers D2C and cross-border eCommerce solutions.
Shipwire is a large 3PL company based in the US that operates on a global scale. The company has over 145 warehouses around the world with a major presence in Europe, Asia, Oceania, and North America. The service is a part of the Ingram Micro Company which is renowned as a technology distribution company.
- Shipwire offers a cloud-based application for the order and inventory management.
- The provider offers same-day delivery options in select regions to eCommerce businesses.
- The service offers reverse logistics services for online businesses.
- The 3PL company facilitates cross-border eCommerce through international shipping documentation processing, import guidance, and global delivery optimization for feasibility.
- The third-party logistics provider offers value-added services such as branding, assembly, stage shipping, inspection, can, and retail partner management.
3. Why Should You Choose the Best 3PL (3rd Party Logistics) Services Company for Your eCommerce Businesses?
Here are some reasons why you should opt for a third-party logistics provider for your eCommerce business:
3.1) Access to specialised services
A 3PL partner can help your business get access to niche services that would otherwise be unfeasible for you. Specialised delivery services will include cash-on-delivery, custom labelling, insurance, vehicle optimization, and faster deliveries.
While looking for logistics partners you may find several aggregators, however, they are essentially middlemen with additional costs in the form of commissions. Getting in touch with a 3PL company eliminates the need for an aggregator and allows your business to negotiate the terms of engagement with the logistics provider. This gives your business dedicated attention and a better experience. This is suitable for businesses that only tend to work with one or two carrier partners.
When companies work with third-party logistics companies, they can leverage the network of resources, partnerships, technologies, and knowledge base that the 3PL partners possess. Since 3PLs are domain experts, they can provide necessary insight into the markets and supply chain models, to help companies make strategic business decisions and hack growth in new geographies.
3.4) Regaining Focus
As 3PLs take the bulk of management responsibility for logistics operations, in-house teams are unburdened. This allows companies to regain focus on core business operations, and deploy human and other resources into business operations. This helps ecommerce businesses focus more on their products and services to enable growth and enhance the customer experience.
3.5) Grow in Unchartered Territories
When you expand into new markets, it can easily become overwhelming. The newfound challenges and lack of knowledge about the new territory will usually lead to unforeseen circumstances. Often companies face crushing competition from existing players when expanding to new markets, and this is where 3PL companies can help.
When you partner with 3PL providers, you get access to their resources and knowledge from the target market, which you can leverage to grow your business. Further, since the 3PL provider has experience in the market, you can compete with existing players by circumventing their home advantage.
3.6) Customer Satisfaction
When you partner with a 3PL service provider, you can enhance the experience of your customers significantly. As an expert in the domain, 3PL employs highly skilled professionals who are trained to provide the best logistics services to customers.
While an in-house logistics arm can be developed by a company, it requires a lot more resources and time for the company than a 3PL partner. With almost no upfront costs, 3PL providers offer state-of-the-art logistics solutions, eventually enhancing customer satisfaction through a cutting-edge delivery experience.
3.7) Reduce Risk
The logistics industry is often faced with operational issues such as delays, damages, weather extremities, and more. When these events happen, the 3PL partners are well-trained, hardened, and equipped with contingency plans to make the best out of the situation and fulfil their responsibilities. Since 3PL companies face these issues regularly, they have the due experience needed to satisfy the logistics operation and manage logistics exceptions with expertise.
3.8) Reduce Expenses
When a company needs high-quality logistics service, starting an in-house logistics arm can cost a fortune. The setup costs alone will take years to return the investment and the operating costs will keep increasing as the company scales. However, when a company partners with a 3PL service provider, it can easily access the services of industry experts and provide an impeccable delivery experience to its customers.
However, the services of a 3PL service provider are a far cheaper solution compared to the upfront costs of an in-house fleet. Further, intangible benefits such as a developed network and experienced workforce offered by the 3PL provider surpass the benefits of an in-house team.
4. The demerits of Third-Party Logistics Companies
While 3PL companies are a great solution for eCommerce, all is not perfect. Here are some reasons why a third-party logistics provider may be less than ideal for your eCommerce business:
4.1) Industry jargon
An eCommerce company would require multiple partners to cover the scope of business. However, communicating with multiple carriers can be tricky. Separate carriers use separate terms for services and due to the lack of a uniform industry term standard, confusion is likely to arise.
4.2) Complexity with carriers
Due to involvement with multiple carriers, businesses may face trouble managing their engagements. In the event of a dispute or query, every individual has to be contacted independently without the availability of a common forum. The process of communicating with every carrier separately is arduous and time-consuming.
For a more comprehensive shipping strategy that allows you to reach more domestic and international customers automatically invest in multi-carrier shipping software.
4.3) Performance tracking
As an eCommerce business serves customers through different logistics partners, it becomes difficult to track business performance. While multiple partners offer multiple insights, the non-uniform data feed causes inconsistencies within the reporting process. The conflict between multiple streams of data disrupts actionable insights.
5. Top 5 Factors to Consider while choosing a Third-Party Logistics Company
The market is full of third-party logistics companies, with more options than one could count. This makes it fairly difficult to understand which shipping company is ideal for your enterprise. Therefore, to help you choose the right 3PL partner, here is a list of factors you must consider before choosing one.
The pricing structure of the 3PL provider is one of the most important factors when choosing a partner. The cost of services will directly affect the profitability of the company, therefore, the cost of services must be justified relative to the value the service provider brings to the enterprise.
A 3PL must be affordable, however, this does not translate into hiring the cheapest provider on the market as that could come with problems such as poor quality of service and subpar customer support. We all know just how important customer service is for reducing dreadful WISMO calls. Therefore, a reasonable price tag that makes financial sense to the company must be the ideal choice.
The 3PL must offer its services to your target market, preferably having your target audience within its core network. This allows you to provide the best possible service to existing customers. However, the 3PL provider must also have a wide enough network to allow you to scale with ease.
This helps you expand your business without hindrances and promotes organic business growth. Further, a 3PL partner with a wide network can help your business leverage new audiences without having to invest large amounts of money, against developing a new customer base from scratch.
The services of a 3PL provider must be relevant to your business. They must serve your core requirements as well as supplementary needs. A company must prefer to choose a 3PL partner which specializes in the service that is most relevant to their business model. This not only creates an efficient logistics ecosystem for the company but also increases customer satisfaction manifold.
3PL providers often offer several customization options to help your receive tailor-made solutions for your business operations. This allows you to make the best out of the partnership and get solutions that can best serve your goals. Therefore, you must opt for a 3PL partner which offers a wide range of customization options to allow you to create a dedicated suite of services for your business.
5.5) Performance History
When considering partnering with a 3PL service provider, you must look at the reviews and testimonials from previous clients of the 3PL company. This allows you to understand the capabilities of the company and helps you understand how reliable their services are. Further, when you inquire about their previous clientele, you can get a fair understanding of the previous experience of the provider and the quality of services it provides.
5.6) Technological Capabilities
As the world adopts technology and more companies, as well as customers, move their data to digital systems, it becomes imperative for companies to partner with providers who offer future-ready solutions.
Therefore, when you are looking for a 3PL service provider to partner with your firm, you must understand the technological capabilities of the company to help you understand if they would be able to provide cutting-edge features and industry-leading solutions that are necessary to gain a competitive edge.
5.7) Value-added Services
Value-added services are often overlooked by companies. However, they can prove to be very important to logistics operations. VASs are solutions that add additional functionality within the logistics process, often helping companies integrate several different solutions. This not only helps companies save on costs of services but also saves considerable time and effort for the organization.
Finally, you must conduct thorough research before partnering with a 3PL to be able to make the best relationship. With so many options available, there would be several 3PL providers that are fit for your needs. Choose a partner after understanding its offerings, requirements, value proposition, and prospects.
A third-party logistics company or a 3PL company is an appealing solution for small businesses that need a scalable solution. A 3PL provider gives businesses access to infrastructure that would cost a fortune to develop and more to maintain. These service providers are specialists in their domain and for an eCommerce business in its nascent or growing stage, setting up a logistics arm is an impractical decision.
While there are several drawbacks to a 3PL partner, it can still be a lucrative choice for businesses that need to leverage the capabilities of existing models at a feasible price point. Each eCommerce enterprise is better equipped to decide in this regard after considering of business model, target market, and future expectations.
7. FAQs about 3PL companies
7.1) How is a 3PL partner helpful for ecommerce businesses?
Order delivery is a key aspect of the ecommerce shopping experience. A 3PL partner allows ecommerce businesses to handle the complex process like order fulfilment and delivery with much ease. In addition to this, an ecommerce business can also avoid having to bear huge infrastructural costs like setting up a warehouse and developing a region-wide distribution network.
7.2) What are the most popular 3PL companies for ecommerce logistics?
While choosing a 3PL partner for your e-commerce business, you can choose from two types of 3PL partners. You can either access 3PL services from well-known carriers like FedEx, DHL, etc. or access 3PL services from popular shipping automation platforms like ShipBob and ClickPost.