Third-party logistics, or 3PL, is the outsourced storage, handling and distribution of inventory by a logistics provider. Services may include receiving, warehousing, pick and pack, shipping, returns and inventory reporting.
Set the service boundary
Define which locations, channels and order types the provider will handle. The agreement should name receiving standards, cut-off times, inventory accuracy measures, packaging rules, carrier responsibilities and exception handling.
| Area | What to establish |
|---|---|
| Inbound | Appointment, count, damage and put-away process |
| Storage | Locations, stock status and cycle counts |
| Outbound | Order cut-off, pick accuracy, pack-out and tracking |
| Returns | Inspection, restock, quarantine and disposal rules |
Cost comparison
Compare the full activity profile rather than the headline storage rate. Receiving, minimum monthly charges, pick fees, packaging, special handling, returns and account-management charges can materially change the result.
Related terms
ecommerce fulfilment, inventory planning, packing list, proof of delivery.
