A third-party logistics provider performs logistics services for another business, such as warehousing, fulfilment or transport management.
How it works in retail
Retailers can outsource selected activities while retaining responsibility for the customer proposition. Contracts define service levels, inventory handling and charges.
A retail example
An online boutique stores merchandise with a 3PL that picks, packs and dispatches customer orders.
What to keep in mind
Outsourcing does not remove the need to monitor accuracy and service. Storage, receiving, packaging, returns and peak-period charges may affect total costs.
Examples are illustrative. Terminology and measurement conventions can vary by business and market.