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 fulfillment 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 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.
- 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 the third-party logistics partner.
2) Top 10 Best 3PL (3rd Party Logistics) Companies for eCommerce businesses [2021 Updated List]
In this article, we discuss the top companies that offer 3PL logistics services or order fulfillment services to an eCommerce company.
ShipBob is a leading provider of eCommerce fulfillment services that started in 2014. This company operates in 220+ countries and has a fulfillment network spread across North America and Europe. The platform leverages proprietary technology developed by ShipBob to provides eCommerce businesses with easy, quick, and feasible fulfillment solutions.
ShipBob offers integrations with online storefronts including Shopify, and Woocommerce 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. The service also makes suggestions using an algorithm to predict the best location for product turnaround.
- The third-party logistics company offers 2-day express shipping service for orders in select regions.
- The provider gives users access to an intuitive application for the order and inventory management.
- ShipBob provides holistic reports for a better understanding of the business, fulfillment centers, 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 fulfill orders. While FedEx has a large shipping network, it also has partnerships with multiple companies to offer a smooth fulfillment experience.
FedEx 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 fulfillment, 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 business.
- 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 Tenessee. This company was founded in 2013 and specializes in the fulfillment 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 shopping carts 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.
2.4) Rakuten Super Logistics
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 simplified services to eCommerce businesses.
- DHL offers end-to-end eCommerce logistics solutions including warehousing, shipping, order fulfillment, 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 customized logistics services based on the needs of eCommerce companies.
2.6) DCL Logistics
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 organizations 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, packaging, delivery fulfillment, and more.
- The company offers customized 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 fulfillment 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 labeling, packaging, shipping, quality assurance, warehousing, and fulfillment.
- 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 an advanced eCommerce fulfillment software that is capable of inventory management, reporting, forecasting, bulk ordering, and order 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 labeling to clients.
- The third-party logistics company offers D2C and cross-border eCommerce solutions.
Shipwire is a large 3PL company based in the US and operating globally. 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 a renowned 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) Top 8 Reasons to 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) Specialized services
A 3PL partner can help your business get access to niche services that would otherwise be unfeasible for you. Specialized may include, inter alia, cash-on-delivery, custom labeling, 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.
When you hire a third-party logistics company, you get access to reporting infrastructure that allows analyzing the performance of your business. Based on the data fed into the 3PL partner’s systems, you can perform a SWOT analysis and understand the areas where you need to improve or put more effort.
3.5) The demerits of a third-party logistics provider
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:
3.6) 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.
3.7) Complexity with carriers
Due to involvement with multiple carriers, eCommerce 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.
3.8) 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.
4) Final conclusion
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 make a decision in this regard after consideration = business model, target market, future expectations.