How 3PL Warehousing Differs from General Storage Warehouses

Third party logistics (3PL) are companies that handle the packaging, storage and transport of goods on behalf of another company. The annual investment in 3PL warehousing keeps growing every year since more businesses are seeing the advantages of this kind of warehousing.

packaging 3pl warehousing

There are major differences between these advanced 3PL warehousing services and general storage warehouses; and these should inform your decision on whether or not such companies will be necessary for your specific business needs.

Packaging & Transport of Products

First of all, 3PL warehousing involves more than just storage of goods. These companies get involved in the packaging of your products and also transportation. Depending on the specific company you choose, all these will be done in a timely manner. A good tip here is not just to consider the pricing of a company’s service as some are priced cheaply for very good reasons.

Basically, with a 3PL warehousing service like that of United Facilities, you are saved the headaches involved after making a sale and can simply focus your energy on what you do best as a businessman: making sales.

Individualized Warehouse Storage Space

3PL warehousing also saves you the pain of losing money during low sales periods. When inventory drops, such warehousing companies will allow you to pay only for the amount of space you need every month. In essence, if you need less space the next month, your payment rates can be adjusted accordingly.

This is typically not the case with general storage warehouses. General storage warehouses typically require a business to invest for a longer term lease and whether you need the space the following month or not, you still have to pay for it.

Labor Support

A company that is growing may experience difficulties in employing staff to oversee the storage requirements of their products. Moreover, small business owners may not even be sure how long a good sales period will last and having people permanently employed could be a big risk.

If you intend to go the route of using a general storage warehouse space, you should be ready to deal with these issues. A 3PL warehousing company saves you this headache as they take the risk upon themselves. What happens in this case is that you trade time for money and in the long run, you actually end up saving more money.

3pl warehousing

Food-Grade & Cold Storage Warehousing

Additionally, 3PL warehousing and fulfillment companies could also offer temperature controlled storage services for those looking to transport perishable foods and drinks. The quality and popularity of food grade storage has been rising over time. If you intend to package, store and transport food products, it is necessary to enquire whether a specific company offers such services.

Since third party logistics companies usually have access to better machinery than a regular business, the quality and expertise involved is usually exceptional. Most of these companies also offer custom packaging services which could be more expensive to obtain if you opt for general storage warehouse space.

Customized packaging can be an important tool in boosting business sales and attracting new customers and top 3PL companies understand this fact well enough. Typically, they will also offer advice on how you should handle your customized packaging.

4PL vs. 3PL: What’s The Best Logistics Solution for Your Company

Fourth-party logistics, or “4PL,” is the arrangement where a firm contracts or outsources its most of its supply chain solutions to more than one companies (who are often the third-parties of the logistics and supply chain). In short, a 4PL company or contractor is more of a coordinator the activities of the 3PL.3PL 4PL Companies

A 4PL provider ultimately accumulates resources, technologies, and capabilities to run the entire supply chain of a company. Ideally, the outsourcing of transport services through a 3PL has been an effective way of utilizing expertise, improving processes as well as reducing costs of transportation by a company. 4PLs are gaining more and more popularity in the logistic sector. They are the multi-service providers handling all the logistic operations right from planning to final reporting.

How 4PL Differs From 3PL Services

A 3PL company does or specializes in the field job i.e. activities such as warehousing, freight forwarding, inward and outward material, contracting transporters, packaging, and safety of cargo among other tasks. 3PL companies typically customizes all these services to suit customer needs.

A good example is the reputable 3PL company United Facilities, Inc. This 3PL provider is so versatile with its logistics and supply chain solutions that many business can rely on them without needed to work with a 4PL to help simplify things.

Lately, most 3PL companies have specialized in some areas of the industry. The advantage with them is that they have various footprints in most parts of the country, and this enables them to serve most clients located in remote areas.

4PL, on the other hand, deals majorly with the management of supply chain, analysis, planning, design, and optimization among other key sectors. 4PLs majorly concentrates on the corporate job and does less of the field tasks. in a nutshell, 3PL mostly execute the real-time tasks while the 4PL primarily executes more of future planning by use of past information. 4PL are effective in improving the supply chain and inbound logistics of a company.

Advantages of Working With 4PL Companies

1. Information visibility offered by 4PL companies allows a company to drive savings and improve service delivery. They are capable of highlighting areas of inefficiency in a shipper’s line of operation. This makes them more efficient, unlike 3PL’s that lack the incentive to drive out wastages and reduce costs.

2. Optimization of material flow. 4PLs enable a smooth transport management system and freight consolidation and other backhaul services and opportunities.

3. Improved productivity. 4PL providers can handle all the logistics on behalf of a company. This allows for easy detection of flaws in the supply chain hence improving the overall productivity of a company.

4. Quality personnel continuity. This is what sets 4PLs apart in the logistics industry. A company can access well-trained staff for quality operations.

5. Ensures neutrality. By fully acting on behalf of a client, a 4PL is capable of providing high-quality services in implementing the transport services of a company. Additionally, they provide essential information needed in meeting the shifting market dynamics.

With the current transition of 3PL to 4PL for some companies, certain business models and manufacturers have found the more conducive logistic services over 3PL. Taking the instance of the automotive industry, electronic and other warehousing companies, 4PL’s have been able to help them pick the best areas of specialization.

This has helped most clients excel in winning customers’ loyalty. Similarly, medical and other health care providers have found their way in seeking an intricate service delivery in clinics and hospitals. They are now able to drill down dip in their line of specialization.