3PL

A third-party logistics (3PL) provider is an outside company that handles warehousing, order fulfillment, and shipping for a business so it can outsource part or all of its supply chain.

What is 3PL?

Businesses hire a 3PL when order volume outgrows what they can pick, pack, and ship in-house. Rather than leasing more space and staffing a warehouse, they tap a provider that already has facilities, carrier discounts, and logistics expertise. This model is common worldwide, and according to Armstrong & Associates, the global 3PL market grew an estimated 3.4% in 2024 to $1.22 trillion.

Key characteristics

Service quality tends to rise too: in the 2025 Annual Third-Party Logistics Study, 82% of surveyed shippers said their 3PLs improved customer service.

  • Warehousing and storage: 3PLs store inventory in their own facilities, often across several locations. This guide to 3PL warehousing explains how it works.
  • Order fulfillment: they pick, pack, and ship customer orders as those orders arrive.
  • Transportation and freight: they negotiate carrier rates and route shipments to control delivery costs.
  • Technology and visibility: 3PL software for ecommerce links sales channels, carriers, and inventory for real-time tracking. A 3PL warehouse management system keeps inventory accurate across multiple clients.
  • Returns and reverse logistics: they process customer returns and restock usable items.

Example

Crossroad Distributor Source, a wholesale distributor, leans on a 3PL model to scale fulfillment. The company achieved 100% on-time delivery of forward orders and tracks 4,500 stock keeping units (SKUs) across multiple locations in North America.

Related terms

FAQ

What does 3PL stand for?

3PL stands for third-party logistics. It describes outsourcing warehousing, fulfillment, and shipping to a specialist provider.

What is the difference between a 3PL and a 4PL?

A 3PL executes hands-on logistics such as warehousing and shipping. A 4PL orchestrates strategy and manages several 3PLs on a company’s behalf.

Do 3PLs actually help?

Among shippers surveyed for the 2025 Annual Third-Party Logistics Study, 89% reported successful partnerships with their 3PLs.