If you’ve ever wondered, “What is a 3PL?” — you’re not alone. As global supply chains grow more complex, third-party logistics (3PL) providers have become essential partners for manufacturers, distributors, and retailers looking to streamline operations and stay competitive.
In this guide, we’ll break down exactly what a 3PL is, how it works, common examples, and why many companies turn to 3PL partners to reduce costs, improve efficiency, and keep customers happy.
A 3PL (third-party logistics) provider is a company that manages all or part of your supply chain operations. This can include:
Warehousing & inventory management
Order fulfillment & pick/pack
Transportation & shipping coordination
Returns processing & reverse logistics
In short, a 3PL handles the logistics functions that happen after production and before the product reaches the end customer.
Think of a 3PL as an extension of your business. Instead of leasing your own warehouses, hiring and training staff, and setting up carrier contracts, a 3PL does it all for you.
Here’s a simple breakdown:
You send products to the 3PL warehouse.
Your goods are stored in their facility, ready to be picked and packed.
Customer orders flow to the 3PL.
Orders come in through your online store, ERP, or order system.
The 3PL picks, packs, and ships.
Using trained warehouse staff and proven processes, they quickly fulfill orders and ship them to customers.
They also handle returns and inventory updates.
By outsourcing to a 3PL, companies can focus on sales, marketing, and product development instead of managing daily warehouse operations.
Not all 3PLs are the same. Some are purely warehousing companies, while others offer complete supply chain solutions. Typical services include:
Receiving & storage of inventory
Order picking & packing (B2B & B2C)
Kitting & light assembly
Labeling & compliance services
Freight coordination & last-mile delivery
Managing seasonal or promotional surges
Returns processing
Some providers (like FHI) also specialize in managed warehouse labor, helping DCs improve productivity by supplying trained teams who integrate with in-house operations.
Businesses choose to work with 3PLs because it helps them:
✅ Reduce costs.
No need to lease multiple warehouses, buy equipment, or hire/training seasonal staff.
✅ Gain scalability.
Ramp up quickly during peak seasons without the headaches of recruiting or temporary hires.
✅ Access expertise.
Experienced 3PLs know how to optimize storage layouts, reduce pick times, and improve throughput.
✅ Focus on core business.
Spend more time developing products and winning customers — not running a warehouse.
Unlike many 3PLs, FHI specializes in managed warehouse labor, partnering with distribution centers to improve productivity, fill second and third shifts, and help facilities avoid labor bottlenecks. With over 30 years of experience in high-volume environments — from foodservice to retail to cold chain — FHI provides a flexible workforce that integrates seamlessly with existing 3PL or in-house operations.
✅ Production pay models that incentivize throughput
✅ On-site management for continuous improvement
✅ Real-time visibility with INSITE™ analytics tools
This approach gives 3PL operators and their customers a competitive edge by combining operational expertise with a scalable, motivated workforce.
What does 3PL stand for?
It stands for third-party logistics, referring to outsourcing logistics functions to an external specialist.
How is a 3PL different from a 4PL?
A 3PL physically handles inventory and fulfillment. A 4PL manages multiple logistics providers and often acts as a single point of integration across the supply chain.
Do small businesses use 3PLs?
Yes. Many ecommerce startups use 3PLs to avoid warehousing costs and fulfill orders nationwide.
Can a 3PL help with returns?
Absolutely. Most 3PLs offer reverse logistics services, helping process returns efficiently.
If you’d like to explore how partnering with an experienced warehouse workforce provider can improve your operations, we’d be glad to help. Contact FHI today to schedule a no-obligation assessment.
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