Advantages and Disadvantages of Using 3PL Providers

Whether shipping internationally or domestically, it can be difficult to determine when and if you will need to start using a third party logistics provider (3PL) for supply chain management. Many times, smaller companies think that this type of outsourcing is too much of an expense and they can find better uses for their finances. The truth is that 3PL's can actually save a company more money and time that is better used in areas like product development, sales and marketing. Not only do these companies get better rates because of their leverage, but they also have the expertise that smaller companies do not have and larger companies rely on. 3PL’s can get problems solved before their customers even find out about it. As great as this sounds though, there are definitely drawbacks to hiring a 3PL. One of the largest is that by outsourcing, a company gives up direct control of their products and how their cargo moves through the supply chain. This can be stressful, especially with a new relationship since the customer is at the mercy of the 3PL. If they do not deliver on time or as promised, the customer is the one that will be dealing with the consequences, not as much the 3PL. This is one of the major concerns of outsourcing since it can sometimes create more stress on the business. A good 3PL, however, will deliver as promised and many times exceed expectations making their customers look better than ever and at a lower cost as well. With a good relationship between customer and service provider, a 3PL can
be great for business.