
3PL refers to the outsourcing of logistics and distribution activities by companies to logistics solution providers, known as 3PL providers. A 3PL provider is a company to which shippers (customers that transport goods using 3PL services) outsource a part or all of the supply chain management (SCM) functions of their logistics services. 3PL providers play a significant role in handling customer logistics requirements, and perform transportation, location tracking, and sometimes product consolidation activities. These providers typically specialize in transportation, warehousing, and integrated operation services, which they customize according to a customer requirement. Often, 3PL providers go beyond logistics, and provide value-added services, such as inventory management, cross-docking, door-to-door delivery, and packaging of products. These companies also provide strategic and operational value to many shippers worldwide. Currently, 3PL is in the process of introducing new and innovative ways to manage SCM.