Read more about what 3PL is, when it is used, and what you should consider if you want to work with an external logistics partner.
What is 3PL?
3PL stands for third-party logistics and refers to an external partner managing parts of your logistics on your behalf. This can include warehousing, picking, packing, distribution of goods, and in some cases also returns management or parts of the customs process.
For companies in e-commerce and B2B, this typically means that you do not manage the entire physical logistics operation yourself. It can be relevant if you want to scale without expanding your own warehouse and staffing, shorten delivery times, or relieve internal operations when logistics become more extensive. This type of setup is also used in flows where companies work with fulfilment centres, WMS solutions, and more complex shipping needs.
A 3PL is not necessarily the same as a fulfilment centre. Where a fulfilment centre typically covers external warehouse space and warehouse operations, 3PL is often used more broadly about a partner that also manages picking, packing, distribution, and other parts of the logistics process.
When is a 3PL used?
A 3PL is typically used when a company wants to outsource warehouse and logistics operations, or when the need for capacity, speed, and flexibility grows.
There are many scenarios where it makes sense to use a 3PL. Let us look at a few examples:
Example 1: When the business is growing quickly
If your order volume increases, it can become difficult to keep up internally in the business. This is especially true if you also need to manage warehouse space, staffing, picking and packing, as well as coordination with carriers. In this case, a 3PL can help by taking over the operational part of the logistics, so you can focus more on sales, customer service, and business development.
Example 2: When you want to sell in more markets
If you are expanding into new markets, a 3PL can make it easier to manage warehousing and distribution closer to the customer. In some setups, a logistics partner can also be part of the practical management around imports and customs, for example when goods are received locally, stored in a warehouse, and distributed further within that market. This can be an advantage if you want to shorten delivery times and create a more scalable setup across borders.
Example 3: When you want more specialised operations
Some companies need logistics flows that involve multiple systems, many orders, or several parties. In this case, a 3PL can be relevant if you want a partner with experience in logistics-intensive processes and a setup that is built to manage higher complexity.
Pros of 3PL
There are many good reasons to use a 3PL. The typical benefits are that you can:
- Scale your logistics without having to build the entire setup internally
- Get access to warehouse operations, managing, and distribution through an external partner
- Free up time and internal resources for sales, operations, and business development
- More easily support growth, new markets, and more complex logistics flows
- Create a more efficient setup for both delivery and returns management
For many companies, 3PL is therefore not just about outsourcing, but about creating a more flexible and robust operation that can keep up with the development of the business.
Cons of 3PL
There can also be drawbacks to using a 3PL, and these are important to understand before choosing a solution.
The typical drawbacks are that you may:
- Have less direct control over daily warehouse and shipping processes
- Become more dependent on good integration and clear workflows between systems and parties
- Experience that errors, delays, or unclear division of responsibilities become harder to manage if the setup is not well thought through
- Hand over part of the customer experience to an external partner, because delivery, packing, and return management will still be perceived as part of your business
This does not mean that 3PL is a bad solution. But it does mean that the collaboration requires clear processes, transparency, and a strong technical setup if it is to work effectively in practice.
What should you consider when choosing a 3PL?
If you are considering third-party logistics, it is a good idea to look at more than just warehouse space and price. You should also assess how your logistics partner works with systems, integrations, and carriers.
Among other things, it can be relevant to examine whether the 3PL:
- Can integrate with your webshop, ERP, or WMS
- Can manage the goods types, carriers, and markets you work with, including special requirements for example for dangerous goods
- Can support international growth and more complex workflows, including customs management
- Gives you sufficient insight into orders, shipping, and operations
For many companies, it is crucial that the 3PL partner does not become too isolated, but is part of a setup where data, processes, and shipping can be managed efficiently across systems, parties, and markets.
Use 3PL and Shipmondo
If you use a 3PL, or are considering working with one, it can be an advantage to choose a setup where you still have control of shipping, data, and integrations in one place.
Shipmondo offers a platform for booking shipments across carriers, integrations with webshops and business systems, as well as solutions for order management, API, and enterprise needs, among other things. This can be an advantage in setups where multiple systems, parties, and markets need to work together.
By choosing a 3PL that works with Shipmondo, you can bring shipping, integrations, and data together in one more connected setup, even as complexity grows.