The Best 3PL Companies List – It’s Not What You’re Expecting
It doesn’t take much effort to find 3PL companies lists online today. You can pull up any search engine, type in “3PL companies list,” and it will deliver many websites and blogs featuring lists of the top 100, 50, 25, or 10, third (3rd) party warehousing providers in the world. These lists show how profitable some logistics companies have become, but they’re often intimidating and confusing to small or mid-sized businesses.
Business owners have to figure out which of the listed companies may provide the services that they need, and more importantly, which companies may partner with them at prices that they can afford. In many cases, business owners spend hours researching listed companies only to learn that none of them are a good fit to their needs.
Do the Best 3PL Companies Lists Truly Vet the 3PLs?
Some 3PL companies lists are created with one thing in mind: profit. The organization or website compiling and presenting the list may operate with a bias towards certain companies, and they may even have something to gain financially from promoting select 3PL companies. Oftentimes, the 3PL companies on the list pay a fee to be placed on the list. While this process, usually referred to as Sponsored Advertising, isn’t illegal, it definitely doesn’t guarantee that the members of the list are the “BEST”, nor does it guarantee that they will be the best company for your business.
3PL companies can rise in ranks through the amount of money they have to spend. The 3PLs within these lists are typically those who have a large marketing budget or pay directly for the endorsement. This makes it more difficult for business owners to find a 3PL company that would truly benefit them.
The lists’ goal isn’t necessarily to connect businesses of all sizes with logistics providers that are reputable, but many businesses just starting out with logistics don’t realize that there are other companies out there besides the ones prominently listed.
Top 3PL Lists Don’t Even Define 3PLs Correctly
Another challenge with “best 3PL company” listings is that they don’t properly classify 3PL companies. 3PL lists often include fulfillment companies in their rankings. Although 3PLs and fulfillment companies are somewhat similar, 3PL companies offer a wider range of services. By using 3PLs and fulfillment companies interchangeably, 3PL companies lists are marketing services that do not cover the entirety of what a business is looking for.
What is a 3PL Company? And What Do 3PL Firms Do?
3PL stands for “third-party logistics.” A 3PL company provides logistics services to companies that do not have their own in-house logistics team. The 3PL company can handle storage, transportation, and other logistical services for businesses.
Logistics is one of the most essential aspects of any business, but it’s also one of the most difficult parts to manage. Many companies find that they need outside help when they’re faced with an overwhelming amount of incoming orders or if they want to expand their operations without hiring more employees.
3PL companies can provide these services because they have experts on hand who can handle every aspect of your shipping needs. They’ll be able to coordinate delivery schedules with multiple carriers and warehouses so that you don’t waste time or money on unnecessary trips around town.
3PL Shipping Companies
True 3PL companies manage more aspects of freight logistics, both inbound and outbound. Sometimes, this is done via in-house freight assets, and sometimes it is done by securing relationships with 3rd party freight carriers (non-asset based). Nonetheless, 3PL companies usually offer the following additional services, above and beyond fulfillment providers:
- Inbound freight, including container and air freight services
- Less-than-truckload (LTL) outbound shipping services
- Full Truckload (FTL) outbound shipping services
3PLs offer logistics services that facilitate some—or all—of a business’ shipping operations. 3PL providers and a business’ warehousing and transportation procedures are integrated to meet their specific needs. 3PLs increase supply chain visibility, operations, finances, and end customer performance through whatever level of involvement a business requires.
3PLs can work with transportation, global shipping, and information technology. On the transportation end, 3PLs can help with LTL or FTL, engaging carriers, or tracking insurance and freight payment. This can lower transportation costs and increase efficiency. 3PLs can also deal with customs, freight forwarding, and consolidations. Managing ecommerce and operations with 3PLs is often done through EDI, API, and cloud-based systems to further increase supply chain visibility.
How is a 3PL Different than a Fulfillment Company?
The main difference between the two is the number of services each provide. Fulfillment companies typically just receive, store, and ship parcel shipments. A 3PL can help with international freight forwarding, customs clearance on the inbound side and on the outbound side, LTL (less than truckload), and FTL (full truckload shipments). 3PLs are oftentimes more geared towards B2B shipping rather than B2C, and they might help with bigger and heavier products as well.
The Challenge for Smaller Businesses and Startups Looking for 3PL Companies
Small to mid-sized businesses often cannot pay the fulfillment services prices demanded by global third-party companies earning billions of dollars each year, and many large logistics companies don’t want to work with smaller businesses unless they store and ship a substantial amount of merchandise each year. Some global companies also specialize in international shipping and storage, so small companies searching for 3PL providers in a localized geographical area won’t meet requirements set out by those companies.
3PL Companies for Small Businesses Versus Large Businesses
3PL companies are not high-risk, high-reward ventures. They are extremely risk-averse. Consequently, if your business is still in its early stages of expansion, the majority of 3PL companies may not be willing to partner with you or make a long-term commitment. Therefore, small businesses should begin searching for a US company as soon as they launch sales and products on the US market.
Generally speaking, you should initiate your search a few months after your US sales launch. At this point, the majority of your plan’s details, including precise inventory counts, arrival dates, item SKUs, etc., should be solidified, and your US-based website should be operational. When these conditions are met, we will be able to help you the best 3pl for small business.
What Kinds of Businesses Use 3rd Party Logistics Companies?
3PL companies are used by businesses of all kinds, from small mom-and-pop shops to huge corporations. They provide a variety of services and specialize in each phase of the supply chain, assisting businesses with everything from procurement and transportation to warehousing and delivery.
Some businesses choose to use a 3PL company because they don’t have the resources or expertise to handle all aspects of their supply chain themselves. Others use 3PL companies as a way to outsource certain tasks that they don’t need to do themselves and want to be done correctly.
How Much Do 3PL Companies Cost?
Each 3PL company has different rates that they charge. The main 3PL costs you will encounter with 3PLs are initial set up, receiving, storage, fulfillment or “pick and pack”, and shipping.
The average set up fee is around $550, but if a provider focuses on helping smaller businesses, the lowest initial setup fee will be around $120-$150. Included in this fee is the cost to set up an account in the 3PLs system, integrate the customer’s online shopping cart with the warehouse, and establish a customer’s preferred procedures and processes. Essentially, what you pay is what you need to get started.
Receiving fees can vary based on what aspect of the product is being charged for. Receiving covers all tasks needed to unload and prepare products for future distribution. Fees run around $35-$45 per hour, but more fees can be added on for extra services. Some 3PLs will charge per order ($30-$50 per order), per pallet ($4-$15), per item ($0.20-$0.25), per SKU ($2.50-$10.00), or per box ($2.90). Companies that charge per container have a receiving fee of $330 for a 20-foot container and $441 for a 40-foot container.
Storage fees are often done by pallet. This charge is based on how much storage space is utilized monthly and is influenced by location, volume, and special requirements. A storage fee can run around $8-$40 for each pallet. Three other forms of charging for storage are per cubic footage ($0.45-$0.55), per bin ($4.07 per bin on average per month), and per square footage ($0.75 per square foot on average per month).
Fulfillment pricing varies depending on what a 3PL charges for product weight and materials. Outsourced warehousing fulfillment providers’ fees run up to $5 or more per package, and they average around $3.13 for a one item B2C order and $4.27 for a B2B. In general, there is a per order and per item fee plus any additional material fees. A standard sized box can range around $0.50-$1.15 if it is small. Insert fees of roughly $0.15 per order can also be distributed if an additional item—such as a coupon—is required within each order.
One of largest fees is shipping charges. Shipping costs are based on volume of packages. Extra fees could be applied if you are looking to ship through your own company account, but for general ground shipping, companies may provide a 10-20% discount. Express shipments, however, allow for higher discounts of around 20-30%, and LTL and truckload shipments can warrant up to a 45-50% discount. Around 93% of 3PLs offer a shipping discount with the Discount Off of Published Rates or the Cost Plus model. The Discount Off of Published Rates model gives a certain percentage discount off of retail rates, and the Cost Plus model add a percentage market up to the shipping cost.
Benefits of Using 3PL Fulfillment Companies
A 3PL company essentially streamlines supply chains which increases efficiency and saves valuable time and money. 3PL companies also provide expertise in supply chain logistics which allows for businesses to receive reliable assistance with managing and distributing products. 3PLs also provide the technology, facilities, and services needed for product distribution. This saves you money by covering all employees and facilities that you would have to invest in. 3PL companies also have expertise in international shipping and flexible technology which allows global growth.
If you are not a logistics expert and still want to be successful in your business, you should consider hiring a 3PL company. They handle various aspects of the shipping process, from receiving goods from suppliers to delivering them to customers. Here are some benefits of using a 3PL company.
3PL companies provide faster delivery times for your products than you would get on your own. They have the resources and expertise to organize and manage large shipments, so you don’t have to worry about getting all your products out at once.
In addition, because they are experts in the field, they can help you optimize your product transportation processes, allowing you to reduce costs and increase efficiency across the board.
Shipping and Logistics System Connectivity
When you outsource your company’s shipping and logistics, you get a partner who can connect to your existing infrastructures. The 3PL provider can manage all your logistics easily. Connecting with your ERP software, POS system, sales channels, and other critical systems for daily operations is part of your 3PL’s job.
Instead of worrying about infrastructure or software, you can run your business. A 3PL company can automate processes like tracking inventory levels at each location and communicating with carriers to know where shipments need to go. This increases an organization’s efficiency, which leads to profitability due to less waste and errors.
Reduced costs are the single greatest reason to use a 3PL company. By outsourcing with a 3PL company, you can achieve lower storage costs, lower fulfillment costs, and because they leverage the aggregate shipping volume of all clients, lower shipping costs than what you’d achieve on your own.
Working with a 3PL can reduce costs by providing a single point of contact for all shipping needs. This can drastically reduce the number of people involved in shipping and saves time. A 3PL company can also reduce costs by bundling shipping needs to make them more affordable.
A 3PL company can offer lower rates than traditional carriers because they don’t have to worry about things like overhead costs, insurance, or the cost of hiring drivers and dispatchers. Because they’re able to pass those savings along to their customers, they can charge less for shipping services than if you were using a traditional carrier.
Improved Customer Service
When it comes to customer service, you’ll want to use a company with expertise in this area. A 3PL company knows customer satisfaction well and can help you improve service. They have beneficial relationships with other companies.
A 3PL company and its clients communicate regularly. When there are problems or questions, they can help get answers or find solutions quickly because they know who understands each aspect of the supply chain process and how to communicate within each step and across multiple steps if necessary.
What to Look for in a 3PL Company
When choosing a 3PL company, the compatibility of your business with their services is most important. The technologies used by the 3PL and their typical scale of operations should line up with the preexisting technology and business volumes of your organization. This ensures all your needs can be met as seamlessly as possible. A 3PL company’s previous performance and customer relations should also be examined to confirm they will be a good fit for your business.
Like most business services, 3PL company outsourcing is risky. Here are things to look for in a 3PL Company:
Customers and Referrals: A good 3PL Company will have a long list of customers and referrals from other businesses. This demonstrates that the company has been able to meet the needs of other companies and can provide a comprehensive service for your company as well.
Credentials: The company should have credentials from top-notch organizations such as DHL or FedEx. Without these credentials, the company may lack the experience or expertise to handle your fulfillment needs.
Reputation: A good reputation is important because it helps ensure that you will receive quality service from the 3PL Company that you choose. Look at reviews online, talk with people who have used this type of service before, and ask questions about their experiences so that you can learn how others feel about working with this company before committing resources to them.
Capabilities: Make sure that the 3PL Company can handle all aspects of your logistics needs, including storage, picking, or packing orders, shipping via air or ground transportation options, and processing returns or refunds if needed.
Pricing: The cost of your fulfillment service should be comparable to those offered by competitors. Paying too much or too little could create issues down the road.
Facilities: The facility where your goods will be stored and shipped from should be safe and secure, with good access for employees and customers alike.
Employees: Ensure that every employee that you will be interfacing with is top notch. They should be knowledgeable and helpful and positive.
Location: Location can affect how quickly your goods arrive at their destination or how long they stay there. The 3PL company’s location must be best suited for inbound and outbound shipping.
Insurance: Success depends on choosing the right company. You want a 3PL company that will take care of your products and protect against catastrophes.
Specialization of Goods Stored and Shipped: Make sure they have experience shipping your product type. As an example, if your products are fragile or require special handling, make sure the shipper has experience.
Contract Terms: As with any business partnership, longevity is crucial. You want someone who will be around when things go wrong or need changing up.
Errors: When you’re working with a 3PL Company, errors can be costly. Make sure that your 3PL Company has a near error-free record and a good track record for fixing problems quickly and effectively.
Shipping Options: Some companies handle shipping, while others leave it up to you or require you to do some of it. Make sure your choice fits your business, so nothing gets missed.
Performance Metrics & Processes: A good 3PL service will provide metrics and processes to track your operations. This includes shipping data, product images, and tracking info.
Financial Viability: 3PL shipping companies come and go like any other. Perform a financial viability analysis on your logistics partner to ensure its longevity. You can check the company’s credit or request financial data. Your main goal is to ensure they have a solid financial future.
Service Levels: The level of service you get from a fulfillment company depends on your deal size and provider. If you have a lot of storage or orders, you’ll probably get good service. Smaller companies may need to search more strategically for a 3PL service that offers the best service and pricing.
The volume of Orders and Storage: When choosing a fulfillment company, you must consider the size of your business and whether it makes sense to work with one. Some fulfillment companies limit volume and others have minimum order quantities. If you don’t sell many products, they may not want to work with you because it’s not profitable for them.
Size of the Products: Product size is another consideration when choosing a 3PL company. Some companies only handle small items. They may not want larger items. Others prefer larger items. Make sure the company you’re considering can handle large or small items.
Sales Channels: Whether the 3PL company offers direct-to-consumer fulfillment or serves businesses or employees through a store, find a company that can manage your sales channels.
Flexibility and Additional Services: Consider your requirements and decide what additional services you require, as well as how adaptable the 3PL company must be. This ensures that you are working with a company that is aware of your requirements.
Mistakes to Avoid When Choosing a 3PL Provider
Choosing the right 3PL company can be a challenge. You want to find a company that can meet your needs, but there are many factors to consider. When choosing a 3PL, avoid these mistakes:
Price alone isn’t enough, and the cheapest option isn’t always the best. Consider the company’s service quality and ability to meet your needs. If you choose a company without industry or need-specific experience, they may not meet your needs.
Don’t focus on their marketing materials. Before making a decision, speak with representatives from each 3PL company to get a clear picture of what they offer and if it fits your business. Flashy marketing materials are one-way companies try to stand out, but they don’t reveal how well they operate or what kind of service they provide.
Cons of Using a 3PL Company
There are numerous advantages to utilizing a 3PL company, but there are also some disadvantages, such as the following:
It’s not a personalized experience. Since you do not know the individuals who are handling your products, there is no real way to build trust with them.
You cannot always see where your product is going or what condition it will be in when it arrives. You may not notice a problem until later.
It can be difficult to control costs when using 3PL companies because they’re often based on volume pricing, which means that the more you ship, the lower your per-unit cost will be.
How to Narrow Down a Shortlist of the Best 3PL Company for Your Business
Finding the best 3PL company for your business is something that’s probably on your to-do list. Here are tips for narrowing the list:
First, consider your business’s needs. Make sure to find a company that offers the services you require to run your business successfully.
Ask around. Ask industry insiders who have used 3PL companies for recommendations. It’s easier to get advice from experts than to figure everything out yourself.
Consider storage space and inventory turnover rates. This determines how much space each facility needs and how quickly orders must be filled.
What’s the Best Location for a 3PL Company: Near Me or Somewhere Else?
The best location for a 3PL company is going to be different for every business. It’s important to understand the needs of your business, as well as your customer base.
Having a local 3PL company can be advantageous if the majority of your customers are nearby. In addition to the ability to pick up and deliver directly from the warehouse, there will also be cost savings.
The less your customers will pay for shipping, the closer you are to them.
Also, if you are the type that likes the thought of visiting your 3PL company, building a relationship with them, and holding them accountable, being in close proximity is best.
However, for most businesses, close proximity isn’t a priority. Especially if your customer base is dispersed across the country or even the globe, it may be more efficient to use an international 3PL company. Having fewer stops along the way and reducing travel time will have a smaller impact on shipping costs than shipping through multiple facilities around the world.
Top Locations for 3PL Companies in the US
The United States is a great place to be a 3PL company. It offers a diverse range of states and locations, each of which has its unique features. Below are the top locations in the US for 3PL Companies:
South California is an ideal location for 3PL companies because it has a large population of blue-collar workers who need to be transported to and from their jobs each day. The area also has a high demand for transportation services due to its proximity to Mexico and other countries with which it shares borders.
New Jersey is another great location for 3PL companies because of its proximity to New York City. This allows for many opportunities for transporting goods between New Jersey and New York via rail or truck.
Dallas, Texas, offers unique benefits as well. It is home to several major shipping ports, which serve as a gateway for goods coming in from other countries. Additionally, Dallas has strong ties with Mexico, which makes it an ideal place for transporting goods between the two countries.
Top Locations for 3PL Companies in Canada
If you’re looking for a 3PL company in Canada, you may be wondering where to begin. You should consider the cost of living, available workforce, and proximity to major transportation hubs when choosing a business location. Here are the top locations in Canada for 3PL Companies:
Toronto is a great place for 3PL companies, thanks to its diverse population and growing economy. It’s also the center of Canada’s financial sector, so there’s plenty of potential for growth in that area as well. Mississauga is among the fastest-growing cities in Canada and is located just outside of Toronto. Its proximity to Toronto makes it an ideal location for 3PL companies looking to expand their operations into the Canadian market. Hamilton is another major economic hub in Ontario and has seen a lot of growth lately, thanks to its location between Toronto and Niagara Falls.
Outside of the Greater Toronto area, Vancouver offers the second most popular 3PL company location in Canada because of its port location for inbound shipping from the manufacturing heavy Far East. The greater Vancouver area is also a large population center in Canada. Finally, another popular option for 3PL companies is Montreal, Canada. For eastern Canada, Montreal is a good option.
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Are All 3PL Company Lists Useless?
Should you just assume that all 3PL provider lists are worthless and try to find other methods of identifying third-party companies that can meet your needs? Not necessarily. Some lists can provide some value to any business in need of a third-party logistics provider. You can look at some of the larger companies to determine whether your business is a good fit with their services, eliminating many companies from your list of possibilities.
If you’re new to the concept of logistics and aren’t sure what services a 3PL can provide, browsing one of these long lists could also help you identify the wide range of services that are currently available to businesses of all sizes. By identifying services used by other companies, you can get a better idea of how you may want to handle your own growing logistic needs.
However, since most businesses find that the companies on these lists aren’t good fits to their needs, we don’t recommend that you spend much time searching them out or reading them. You may get some introductory information from select lists if you want to do your own research, but 3PL networks like the one found at WarehousingAndFulfillment.com are a far better use of your time.
How Can WarehousingAndFulfillment.com Help Your Find a 3PL Vendor?
There are hundreds, even thousands of 3PL providers operating in North America today and thousands operating around the world. Some specialize in select services while others offer a long list of services and provide customized contracts to each of their clients. There are companies that specialize in certain types of goods or specific industries, and then there are global companies that can help businesses in any industry. This makes it difficult to find the providers that are well suited to your needs because there are far too many companies to thoroughly research and compare on your own.
That’s the reason WarehousingAndFulfillment.com was created. We have done exhaustive research into Fulfillment Services, Fulfillment Houses and Fulfillment Companies so that we can quickly match customers like you with the third-party logistics providers best suited to their needs. Our network of third-party providers is different than those long 3PL company lists featured through other websites because we research 3PL companies of all shapes and sizes, and there’s one additional difference: we have thoroughly screened every provider in our network.
Unlike many 3PL company lists, we do not accept payment to include companies in our network. Any extensive advertising or potential marketing opportunities are not taken into consideration during our evaluations. Our completely unbiased screening process ensures that each 3PL company we list is assessed thoroughly. We also include many smaller 3PL companies that you just won’t find on those top 100 or top 50 3PL companies lists.
You also receive our guidance and personal help to ensure the provider you choose is well suited to your needs and budget, so contact us to begin the process of requesting quotes from multiple 3PL providers online.
Our Search for the Best 3PL Companies Lists
The search for the best 3PL and Fulfillment companies is under way. We know that there are a number of different “Top 100 3PL Company” lists out there, but they’ll all focused on the large scale logistics companies. And while these companies are great, they’re not always the best fit for smaller to mid sized companies looking for outsourced fulfillment services.
So WarehousingAndFulfillment.com is looking for the top small to mid sized 3PL and fulfillment companies. What does it take to make the list? We’re looking for companies that have strong customer service and happy clients, low error rates, high on-time shipping percentages, solid technology platforms, among other things.
If you think your company has what it takes, here’s the benefit for you – upon selection and if you pass our screening, you’ll be selected as a Top 3PL and Fulfillment company and will be listed on our site. In addition, we’ll announce it on our site and through a press release. And on top of everything else, you can proudly display the Top 3PL badge on your site to customers.
To find out more of the specifics, please contact us at [email protected].
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Some of the Best 3PL Companies
Below are some great 3PL companies. Fill out a quote request on our site to get YOUR best matches.
WSI’s goal is to maximize efficiency and minimize costs. WSI has built their company on the foundation of reliability, and with 10 distribution centers and a large family of companies, WSI has created a reputation of dependable service and integrity.
Address: Appleton, WI
FW Warehousing is a mid-sized logistics service provider that is large enough to handle all business needs while still providing specialized services. Customer relationships are heavily emphasized with FW Warehousing to promote customer success. Their cost-effective and efficient operations target business’ long-term goals without compromising on quality.
Address: Belleville, IL
Shipping rate: 99.9%
MKM Distribution Services, Inc.
MKM Logistics is in Indianapolis, IN, an optimal location for nationwide distribution. MKM’s dedication to flexibility and customer communication guarantees your products will be handled and distributed according to your requirements. No matter the size of organization, MKM will be able to handle your fulfillment and supply chain logistics to get your business running smoothly.
Address: Indianapolis, IN
eShipping provides distribution chain management through all modes of transportation, optimized carrier rate programs, and data and financial visibility. Based in Kansas City, MO, eShipping has distribution centers in seven states and a wide array of transportation modes to ensure products are shipped efficiently. With their growth focused philosophy, eShipping would be a great option for those looking to expand their business.
Address: Parkville, MO
Retention rate of customers: 90%+
With small beginnings in Texas, Expak Logistics is a 3PL company that offers a variety of delivery services, LTL services, and many other supply chain logistics services to accommodate your business. Expak Logistics’ emphasis on problem solving and small business’ needs makes them an ample option for startups and smaller businesses.
Address: Los Angeles, CA