Growing a business comes with its own set of challenges. At some point, handling warehousing, shipping, inventory, and returns in-house can slow your pace instead of helping you reach the next peak.
That’s where a 3PL, Third-Party Logistics Provider, comes in. By taking on the heavy lifting behind the scenes, a 3PL gives you the freedom to focus on strategy, growth, and the bigger climb ahead.
What Is 3PL?
A 3PL is a third-party logistics company that helps businesses outsource core parts of their supply chain, from warehousing and fulfillment to delivering products to clients. They work with e-commerce brands, wholesalers, and manufacturers, providing the expertise and infrastructure to streamline operations, lower costs, and keep growth on track.
3PL Services Include
Third-party logistics solutions cover a wide range of services for domestic and international supply chain operations. To name a few:
- 3PL Warehousing & Storage
- Inventory Management
- Order Fulfillment
- Transportation & Shipping
- Returns Management (Reverse Logistics)
- Sourcing & Procurement
- Packaging & Kitting
- Freight Brokerage/Forwarding
- Last-Mile Delivery Services
- Access to Technology, like WMS (Warehouse Management System) & TMS (Transportation Management System)
- Supply Chain Consulting and Optimization
Together, these services form the backbone of modern logistics partnerships – helping businesses cut costs, improve efficiency, and stay agile in a competitive marketplace.
The term third-party logistics provider means a person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.
U.S. Code of Commerce & Trade, Consumer Product Safety Improvement Act, 2008
How Third-Party Logistics Works
3PL logistics solutions are designed to plug directly into a company’s supply chain, often powered by advanced technology and automation.
A typical 3PL logistics example involves three parties: the business (first party), the customer (second party), and the logistics provider (third party).
In short, the business produces goods and processes customer orders, then transmits these orders to their logistics provider. The 3PL, in turn, manages the inventory and fulfillment and coordinates with shipping carriers to deliver products to the end customer.
The Growth Of 3PLs
The idea of 3PLs took root after the Motor Carrier Act of 1980 deregulated the trucking industry, which resulted in lower trucking rates and an increased amount of competition – ultimately paving the way for new logistics models.
The term 3PL itself spread in the 1990s through consultants and industry conferences, alongside the rise of the internet. Some years later, in 2008, the Consumer Product Safety Improvement Act gave 3PLs an official legal definition.
The 2000s pushed growth further. E-commerce expansion, along with tools like real-time tracking, GPS, and IoT, gave logistics providers new visibility and control. At the same time, online platforms connected businesses to global customers, setting new expectations for speed and transparency.
Some years later, the pandemic accelerated this shift, according to industry experts, forcing 3PLs to scale overnight as demand for same-day delivery spiked. Although this revealed weak points in the industry, 3PLs now represent a $1.39tn global market – driven by rising consumer demand for faster, cheaper, and more reliable logistics.
3PL Examples
Here are a few examples of how a 3PL can help optimize your supply chain operations:
E-Commerce Fulfillment
For online retailers, fulfillment is at the center of third-party logistics. So, a fast-growing eCommerce brand facing high order volumes may turn to a 3PL for warehousing, inventory, picking, packing, and shipping. This helps them achieve accurate, on-time deliveries without the cost of building their own facilities.
One well-known example is Fulfillment by Amazon (FBA). By outsourcing storage, packaging, and shipping to FBA or similar providers, businesses cut costs, improve efficiency, and stay focused on what matters most: developing products and growing sales.
Consistent Service Quality
Consistent, high-quality service builds customer loyalty. As a result, many businesses partner with 3PLs when they realize they don’t have the resources or expertise to achieve this on their own.
So, for instance, an early-stage eCommerce company may manage fulfillment in-house for a while, but because supply chain management is complex, this eventually becomes a barrier to growth. Partnering with a 3PL helps SMBs deliver the consistent service customers expect and scale sustainably.
New Market Entry
A 3PL can also open the door to new U.S. markets by providing warehousing, inventory management, and nationwide carrier partnerships. Instead of building new facilities, companies can place stock with a 3PL already set up to manage storage, fulfillment, and distribution at scale.
Take a 3PL in Utah, for example. Shipping from this central location offers quick access to interstates, rail lines, and an international airport – connecting efficiently to both coasts. With this kind of infrastructure, businesses can cut transit times and reach new markets faster, all while keeping service dependable.
Expand Your Reach With Agile 3PL Services
At Agile SCS, we help eCommerce brands and wholesalers simplify logistics – handling everything from picking and packing to inventory tracking and returns.
With years of experience in e-commerce and wholesale fulfillment, advanced tech that integrates seamlessly with major platforms and strategically located hubs, we give you the tools to climb higher – faster shipping, lower costs, and the flexibility to scale without carrying extra weight.
Ready to reach more customers? Let’s connect!
FAQs – Frequently Asked Questions On 3PL, Third-Party Logistics Providers
3PL vs Freight Broker: Is There A Difference?
Yes! Freight brokers are non-asset-based providers that connect shippers with carriers. A 3PL, on the other hand, takes on broader fulfillment operations and direct responsibility for goods, managing functions like shipping, storing, packing, and more.
What Is The Difference Between 3PL vs 4PL?
The key difference lies in scope and control. A 3PL executes logistics operations such as warehousing, transportation, and fulfillment. Conversely, a 4PL acts as a strategic partner, often without owning physical assets, overseeing multiple 3PLs, and managing all resources within an organization’s supply chain.
What Is A 3PL Warehouse?
A 3PL warehouse is a facility operated by a third-party logistics provider that stores, manages, and fulfills orders for client businesses. These warehouses handle receiving, picking, packing, and shipping products, often being strategically located to optimize distribution.
Where Should I Use 3PLs In My Supply Chain?
3PLs can add value in nearly every part of supply chain management. Companies rely on them to gain efficiency, expertise, and cost savings. Common scenarios include entering new markets, reducing costs, improving customer service, or overcoming inventory challenges.
In fact, a recent study found that managing labor costs was the number one reason businesses turn to a 3PL.