E-Commerce Dictionary
Third-Party Logistics (3PL)
Definition
Use of third-party businesses to outsource elements of the distribution, warehousing, and fulfillment services.
Deep Dive
Third-Party Logistics (3PL) refers to the outsourcing of various logistics and supply chain management functions to external, specialized businesses. Instead of managing warehousing, transportation, fulfillment, and other distribution services in-house, companies partner with 3PL providers who have the expertise, infrastructure, and technology to handle these complex operations more efficiently. This strategic alliance allows businesses to streamline their supply chain without significant capital investment in facilities or equipment.
Examples & Use Cases
- 1An e-commerce brand partnering with FedEx Supply Chain to manage its warehousing, order fulfillment, and shipping needs
- 2A manufacturer using DHL Global Forwarding for international freight, customs clearance, and global distribution
- 3Amazon's Fulfillment by Amazon (FBA) program, allowing third-party sellers to store products in Amazon's warehouses and have Amazon handle packing, shipping, and customer service.
Related Terms
Supply Chain ManagementFulfillmentOutsourcing