Third-party logistics (3PL)

A 3PL provider takes over logistics functions a company would otherwise run itself. Typical services include warehousing, inventory management, picking and packing, e-commerce fulfillment, returns handling and managing transport with carriers. Contracts often run for several years and are priced per pallet stored, per order handled or per shipment, and the provider's systems usually connect to the client's so that orders and stock levels stay in sync.

3PL and freight forwarding overlap, and many large forwarders offer 3PL services, but the emphasis differs. A forwarder focuses on moving shipments, especially across borders. A 3PL focuses on ongoing operations, particularly storage and fulfillment for a client. Related labels describe other layers: 1PL is the cargo owner doing its own logistics, 2PL is an asset-owning carrier, and 4PL is a provider that manages several 3PLs and carriers on a client's behalf.

Choosing a 3PL is mostly about fit: where its warehouses are, which volumes and product types it handles well, how its systems integrate and what service levels it commits to. In the United States, “3PL” is also widely used for freight brokers and logistics companies that arrange truckload and LTL freight without owning trucks, so it is worth asking what a given provider actually does.