Third Party Logistics Management: How We Run Fast, Lean, and Ready to Scale

📖 Estimated reading: 15 mins

Key Points

• Third-party logistics (3PL): Outsourcing warehousing, fulfillment, and transportation to specialized providers like Shipping Bros.

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• Core components: Receiving, warehousing, order processing, shipping, and value-added services are vital for efficiency.

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• Benefits: Cost savings, improved customer experience, scalability, and allowing brands to focus on core activities.

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• Technology: A mix of WMS, OMS, TMS, and analytics ties all logistics steps together for seamless operation.

What's Inside

• What is third party logistics management?

• Key components of 3PL

• Why brands use a 3PL

• How we implement 3PL at Shipping Bros

• Technology that powers 3PL

• Value-added services

• Cost savings benefits

• Customer experience improvements

• Let your team focus on core work

• Scaling with 3PL

• Signs of good 3PL management

• Common roadblocks and solutions

• How to choose a 3PL partner

• 3PL pricing overview

• Measuring success

• Examples by product type

• Risk management & compliance

• AI and rules in logistics

• Getting started checklist

• Customer outcomes from effective 3PL

• Final thoughts

What is third party logistics management?

Third party logistics management (3PL) involves partnering with specialized companies that handle critical supply chain functions. These functions can include warehousing, inventory management, order fulfillment, transportation, packaging, and even customs brokerage. The primary role of a 3PL provider is to act as an intermediary that streamlines operations, boosts efficiency, and reduces costs for brands. This outsourcing model allows brands to focus on growth while gaining access to advanced logistics tools and expertise.

Key components of third party logistics management

3PL work is built around essential functions, each vital to smooth, fast order fulfillment:

• Receiving: The 3PL receives products from suppliers, inspects incoming items, databases them, and stores goods efficiently. Learn more here.

• Warehousing: Proper storage enables quick picking and safety, protecting your products while making order flow smooth.

• Order processing: Picking, packing, and shipping are handled via integrated software connecting your store or order management system.

• Shipping and delivery: Carrier booking and optimized packaging help reduce costs while ensuring timely delivery. More details here.

• Value-added services: Custom packaging, labeling, returns handling, and even customs brokerage elevate the customer experience.

Why brands use a 3PL

Choosing a 3PL delivers multiple advantages:

• Cost savings: Volume discounts and operational efficiencies lower fulfillment costs source.

• Better customer experience: Reliable, consolidated shipments and on-time delivery increase satisfaction source.

• Focus on core activities: Offloading logistics enables your team to prioritize product development, sales, and marketing source.

• Scalability: Well-designed 3PLs support growth during peaks and new channels without major disruptions.

How we put third party logistics management into practice

At Shipping Bros, we follow a straightforward process:

• Intake & Planning: Catalog review, SKUs, channel mapping, storage logic, and SLA setting. Integration with your store here.

• Receiving & Putaway: Appointment scheduling, quality inspection, barcode scanning, labeling, and strategic storage.

• Storage & Slotting: Smart assignment of locations, seasonal adjustments, and efficient signage.

• Order Flow & Pick Paths: Order grouping, error-proof scan-to-pick, kit building, and optimized routes.

• Packing & Right-Size Packaging: Selecting appropriate containers, minimal dunnage, and branding elements.

• Ship Method & Carrier Selection: Cost-efficient routing, real-time rate shopping, and immediate tracking at handoff.

• Exceptions & Returns: Handling backorders, quick processing of returns, and restocking.

• Reporting & Reviews: Weekly KPI dashboards tracking ship times, accuracy, and cycle times for continuous improvement.

The software that makes 3PL work

Technology seamlessly connects supply chain steps:

• WMS: Manages receiving, storage, picking, and shipping with scan-based error reduction.

• OMS: Links your store and WMS; manages order routing and rules. See details.

• TMS: Rates and books freight—parcel, LTL, FTL—through real-time systems.

• Analytics & Alerts: Monitors performance, flags issues, and drives improvements.

Value-added services that lift the brand

Beyond core functions, we offer:

• Custom packaging, branded boxes, and inserts

• Special labeling: barcodes, retail, compliance

• Kitting and light assembly for bundles

• Fast returns with inspection and restocking

• Cross-border customs brokerage services

How third party logistics management saves money

Cost reductions come from:

• Volume discounts: Pooling orders lowers carrier rates source.

• Labor efficiency: Better workflows increase orders per labor hour.

• Right-size packaging: Smaller boxes and fewer fillers reduce dimensional weight charges.

• Optimal shipping methods: Ground shipping often balances cost and timing.

• Error reduction: Fewer mistakes mean less re-shipping and fewer customer service costs.

How third party logistics management improves the customer experience

Consistent, reliable delivery builds trust:

• Faster dock-to-stock: Rapid inventory availability reduces delays.

• On-time shipping: Same or next day dispatch supports customer expectations.

• Clear tracking: Live updates and clean labels provide transparency.

• Fewer split shipments: Better inventory layout minimizes partial orders.

• Easy returns: Streamlined process keeps customers happy, even when returning.

Let your team focus on core work

By partnering with a trusted 3PL like Shipping Bros, your internal team can dedicate more time to product development, marketing, and customer support. This relay of responsibilities enables faster growth without the overhead of managing a warehouse or complex logistics systems, as our expertise and technology handle the details efficiently.

Scale up without breaking your flow

Growth challenges are easier to handle with a strong 3PL:

• Seasonal flexibility: We plan capacity for peaks, adding shifts as needed.

• Adding markets: New regions or channels are integrated smoothly.

• Expanding catalog: More SKUs are slotted without loss of speed.

• New regions: Additional fulfillment nodes reduce transit time.

What good third party logistics management looks like day to day

Signs of a well-functioning system include:

• Orders consistently ship on time.

• Pick errors are minimal and quickly corrected.

• Inventory counts match physical stock.

• Inbound stock becomes available promptly.

• Returns are processed fast with detailed documentation.

• Operational dashboards provide real-time visibility.

Common roadblocks and how we prevent them

Typical challenges include data inaccuracies, inefficient slotting, over-packing, address errors, and surges. We mitigate these risks through:

• Data validation and catalog clean-up at inbound.

• Seasonal re-slotting based on velocity.

• Cartonization rules to optimize packaging.

• Address validation tools to reduce missed deliveries.

• Advance surge planning for volume spikes.

How to choose a 3PL partner

Consider these factors:

• Match to your order types and SKU volume.

• Check for seamless tech integrations.

• Clear SLAs, KPIs, and reporting structure.

• Operational transparency and scalability.

• Proximity to your main customer bases.

• Transparent pricing with no hidden fees.

• Strong references and customer reviews.

How pricing usually works

Common pricing components include:

• Receiving: cost per pallet or hour.

• Storage: weekly/monthly per bin or pallet.

• Pick & pack: per order and per item charges.

• Packaging: standard or custom boxes and labels.

• Postage: carrier rates, often volume discounted.

• Projects: labeling, rework, or special services billed separately.

• System access fees may apply but are typically transparent.

How we measure success together

Key metrics to watch include:

• Percentage of orders shipped on time

• First-time pick accuracy

• Inventory accuracy versus physical count

• Inbound to inventory live time

• Order lead time from placement to ship

• Returns cycle time

• Cost per order

Examples by product type

Different products require tailored handling:

• Apparel: Sizes and colors are managed with clear labels and folding standards.

• Supplements: Lot tracking for safety and traceability.

• Beauty/skincare: Leak-proof seals and safety checks.

• Home goods: Custom cartonization for odd sizes.

• Electronics: Secure storage and high-value asset management.

• Food: FIFO/FEFO inventory controls for perishables.

Risk and compliance

Maintaining safety, data security, and regulatory compliance is critical:

• Safe working environments

• Role-based data access

• Operational SOPs and audits

• Customs & import/export compliance including HS codes and duties

How AI and simple rules can work together

While the core is process-driven, we leverage tools like:

• Sales trend prediction for staffing

• Slotting recommendations for fast movers

• Carrier selection optimization

• Inventory anomaly detection

This keeps systems practical and outcomes predictable, avoiding unnecessary complexity.

Getting started: a short checklist

• Clean SKU data: verify barcodes, dimensions, and weights

• Define SLAs for shipping times and accuracy

• Outline packaging needs, branding, and special requirements

• Share forecast for upcoming volume and peak periods

• Plan return processes and criteria

• List all sales channels and order types

• Identify any special handling or product-specific needs

What your customers feel when 3PL is done right

Consistent, timely deliveries and seamless returns create loyal customers who:

• Receive orders intact and on schedule

• Enjoy clear tracking updates from dispatch to delivery

• Find packaging quality matching your branding

• Experience hassle-free return processes

• Leave positive reviews and become repeat buyers

Pulling it all together

Effective 3PL management encompasses every stage—from receiving to delivery—and relies on simple yet integrated processes. It amplifies your brand’s ability to scale quickly, improve customer satisfaction, and control costs. By partnering with a committed provider like Shipping Bros, you gain a dependable team that simplifies your supply chain—so you can concentrate on building your brand.