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It doesn’t take much effort to find “best 3PL companies” lists online these days. Pull up any search engine and type in your query. Within seconds, you’ll receive pages of results featuring the top 10, 50, or 100, third (3rd) party warehousing providers in the world. These lists, or 3PL directories, oftentimes use annual sales or profit margins, existing and biased relationships, or even “under the table agreements” to rank the companies and provide at least the illusion of a logistics company’s success. These lists are frequently intimidating and confusing to small or mid-sized businesses, since they appear trustworthy but are inherently biased and usually contain a list of companies that aren’t workable for various reasons. Furthermore, staring at financial statements doesn’t necessarily translate into being the best fit for your unique needs.
Business owners can find themselves going down a rabbit hole determining which companies on these lists offer the services they need. More importantly, they need 3PLs that fit within their budgets. Owners can waste hours researching only to discover none of the listed companies are a good fit.
The challenge in finding the best 3PL company is knowing which lists you can trust as a starting point for your search. Most lack objectivity because they’re sponsored or influenced by the companies featured. Most of these rankings focus on large, well-known providers, overlooking smaller boutique, specialized 3PLs that might fit your needs better.
Other issues may include:
Warehousing and Fulfillment makes finding reputable 3PL companies a breeze with our guide on how to sort fact from fiction when encountering “top 3PL” lists. We offer one of the most comprehensive resources for 3PL services online by providing transparency into operations, costs, and performance metrics to determine whether a 3PL is the right fit.
Most 3PL company 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 third-party logistics companies on the list pay a fee to be placed on the list. Some third-party logistics providers rank well due to bias or other financial rewards for the organization making the list – not because they offer superior services.
While this process, usually referred to as Sponsored Advertising or sponsored content, 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 typically 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 list’s goal isn’t necessarily to connect businesses of all sizes with logistics providers that are reputable and best suited for their requirements. Still, many businesses just starting with logistics don’t realize that there are other companies besides the ones prominently listed. They can make a costly mistake because they don’t know how to find a better fit for their needs and budgets.
It’s a good rule of thumb to approach these best 3PL companies lists cautiously. Not all of them are created with your best interests in mind.
We routinely search the web for 3PL and fulfillment companies and make it a regular habit to pour over all the top 3PL company lists to see who is mentioned and learn more and more about the industry we work in. Strangely enough, we view three common characteristics when viewing most of the outsourced logistics companies listed on the “top” website.
First, it’s not uncommon for a 3PL company to create and publish a list of the top 3PLs on its website, which seems somewhat absurd, doesn’t it? When someone views a listing of recommended 3PLs, they assume it’s objective and based on solid research. However, a common tactic is to create the list, put your 3PL company at the top, and then round it out with a few other third-party logistics services. But the fun doesn’t stop there – a common tactic is not only to list themselves on their list of top third-party logistics companies, but on top of that the 3PL usually lists themselves as the number 1 option no less!
We at WarehousingAndFulfillment.com have a very dry sense of humor and are oftentimes told that we’re very sarcastic – so please excuse our ‘tongue in cheek’ tone on this topic. In all seriousness, many serious searchers for third-party logistics companies miss this vital “trick” that is being played on them – and our main concern is to point people in the right direction when making this extremely important decision.
So, when you’re looking at the top lists of logistics companies, be sure to make appropriate discounts for companies that publish their list and place themselves at the top of the list. Always check the source of the list to determine whether it’s biased. Be cautious of any 3PL that engages in this practice.
The second common trait of many of these lists is that the listed companies are not so much 3PL companies as they are fulfillment or pick and pack companies that focus almost exclusively on parcel and B2C shipping.
As explained in further detail in this article, 3rd party logistics companies occupy a much smaller percentage of the overall warehousing market, offering quite a bit more than a standard warehouse. Most notably, third-party logistics companies are experts in all things Logistics – AKA shipping. They specialize in helping companies ship their product to the warehouse using freight forwarding from overseas, or parcel, LTL (less-than-truckload), or FTL (full truckload) shipping.
They also specialize in outbound shipping of products to your customers, as they most frequently have strong capabilities in LTL and FTL outbound shipping, which often get shipped to business clients rather than directly to consumers. It’s a completely different type of service than a standard warehouse.
Third, many lists have a peculiarly common set of companies that seem to reside on most lists. This could only mean one of two things – either the companies are truly the best and deserve to be on most lists compiled on the web, or this common set of companies are expert internet marketers that work diligently on their company’s digital marketing and online visibility.
If, in fact, these common set of companies were truly deserving of the “top” distinction, then the information you find on them when searching for them individually would be telling – it would paint a picture of a company that, while not perfect, garners high reviews and marks from customers that have worked with them or are currently working with them.
On the other hand, if online reviews of these popular companies aren’t as favorable as one would suggest, it would certainly point to the notion that they are expert marketers and that the ”top” distinction isn’t necessarily earned through performance. If you notice a 3PL on one of these lists has mixed reviews, it may signal their appearance on the list had more to do with skilled marketers than performance.
Below are some of the findings when we searched each of these popular companies that appear on many lists. We’ll leave it up to you to decide whether they are legitimate top 3PLs or if they have a bigger part in their appearance on these lists than they would like you to know.
While not an exact science, a seemingly good baseline for a top company would at least be at the 4-star rating or better. Also, this list is not intended as a top outsourced logistics companies list, but rather a review of the list! In other words, these are not who we would recommend for you using our matching service – these are some objective thoughts on the most commonly listed companies on the top lists.
Shipbob is an example of a large company that has experienced significant growth (they’ve received a great deal of venture capital funding). They officially launched in 2014 and focus on businesses needing B2C logistics services, although they have recently started a B2B division.
Customer reviews are mixed on the company. Capterra shows a 3.7 out of 5 stars, with some customers complaining about overcharging, missing items, and poor customer service. Webretailer rated the company even lower at 2 out of 5 stars, citing numerous complaints about shipping errors. They didn’t fare much better on Yelp, scoring 2.1 out of 5 stars, with many reviewers calling them one of the least dependable 3PLs.
There have been some more recent negative reviews, so it’s at least worth digging in to speak with them further to gain more comfort moving forward.
As a company that has been around for quite some time, we expected to see many reviews for Shipwire, and we weren’t disappointed. However, the feelings weren’t warm and fuzzy when we uncovered a 2.2 rating from Trustpilot from 175 reviews (a great sample base), a 1.3-star rating from Capterra, and a 2.2 rating from G2. Customers claimed the 3PL was expensive and had a lot of hidden fees. Others noted it was mismanaged. These reviews, with their great sample size, make other review sites such as Ecommerce Platform (4 Star rating and a highly recommended company off of 1 review) and Gartner’s 3.5 Star rating off of 3 reviews seem underwhelming.
Granted, as a large organization that has been around for a long time, you would expect to see quite a few more negative reviews than most companies.
In our experience, Red Stag Fulfillment is one of the fulfillment companies on these lists that truly belongs to be included. They are an upstanding group of individuals and deliver a top-notch service. The only drawback is that they are extremely focused, which isn’t a knock on them but rather some simple guidance because they aren’t able to help everyone.
The 3PL specializes in higher-order volumes and prefers to work with companies that sell heavier products. As a smaller company, they don’t have a wealth of reviews. However, customers give them a 4.0 out of 5 stars on Google (based on 62 total reviews). The 9 reviewers on Webretailer rated them at 4.9 out of 5 stars.
Rakuten SL didn’t get the best reviews from customers. Established in 2001, the company originally was known as Webgistix and has a wide fulfillment network across the U.S. Regarding reviews, Rakuten Super Logistics pulled 2.8 stars out of 5 on Trustpilot, out of 3 reviews listed. On Webretailer, they didn’t fair as well with a 2.5 out of 5-star rating, some of the ratings of which included terminology such as “The worst 3PL ever,” “do not work with RSL,” and “just stay away from RSL if you want to succeed in your business.” And Yelp reviews are even worse – totaling a 1.5-star rating out of 5 stars. One reviewer compared his experience with the 3PL to the Stephen King horror “Misery.”
What we know about Rakuten Super Logistics: From our experience, RSL loves working with large companies – those that send out tons of orders per month. This is a company that may not be the best fit if you don’t ship high volumes.
WhiteBox is an interesting inclusion on many of the top 3PL companies lists – interesting because they aren’t as popular as some of the big names in the industry and offer quite a few other services that fall outside of the scope of fulfillment – such as ecommerce software and Amazon agency management services.
The number of reviews online for WhiteBox is small, but they achieve a higher rating from these smaller quantity of reviews. Trustpilot rates them a 4.5 Star, G2 gives them a 5 Star (only 2 reviews though), and Yelp gives them a 2.5 Star.
Shipmonk is a newer fulfillment service that has grown immensely in the last few years, particularly though acquisition. With a Series A investment and growth equity totaling over $350 Million and a recent acquisition of Ruby Has Fulfillment, the company has a large footprint. In fact, the company currently has 11 locations in the US, Canada, Mexico, and Europe.
ShipMonk garnered 4.3 out of 5 stars from Trustpilot, with 348 total reviews. Shopify reviewers gave them a 4.5 (127 total reviews). Negative comments included complaints about customer service – an area where the company still has room for improvement.
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 from those long 3PL company lists featured through other websites because we research 3PLs 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 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. Don’t leave your logistics operations to chance!
Our search for the best third-party logistics companies is underway. While the “Top 100 3PL Company” lists highlight large-scale logistics companies, they might not always suit smaller to mid-sized businesses looking for outsourced fulfillment services.
Warehousing and Fulfillment focuses on identifying the top small to mid-sized 3PL and fulfillment companies. Our criterion for making the list includes:
Check out some of the 3PL companies who have already made our exclusive list.
Established 1966
WSI’s goal is to maximize efficiency and minimize costs. WSI has built its company on the foundation of reliability, and with 10 distribution centers and a large family of companies, WSI has created a reputation for dependable service and integrity.
Established 1949
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 the business’ long-term goals without compromising quality.
Established 1981
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 an organization, MKM will be able to handle your fulfillment and supply chain logistics to get your business running smoothly.
Established 2004
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.
Established 1966
With small beginnings in Texas, Expak Logistics is a 3PL company that offers various delivery services, LTL services, and many other supply chain logistics services to accommodate your business. Expak Logistics’ emphasis on problem-solving and small businesses’ needs makes them an ample option for startups and smaller businesses.
These are just a few examples, which may or may not fit your specific needs. In order to get matched with your best 3PL companies for pricing, fill out our online form or call us today!
Should you just assume that all 3PL provider lists are worthless and try to find other methods to identify third-party companies that meet your needs? Not necessarily. Some lists can provide 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 fits their services well, eliminating many companies from your list of possibilities.
If you’re new to the concept of logistics and aren’t sure what services a third-party logistics company 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 better understand how you may want to handle your growing logistic needs.
However, since most businesses find that the companies on these lists don’t fit their needs, we don’t recommend 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 research, but 3PL networks like the one found at WarehousingAndFulfillment.com are a far better use of your time.
The biggest risk of relying too heavily on “best 3PL companies” lists is the potential for a mismatch. Many businesses find the companies on these lists don’t meet their specific needs. Spending too much time on them is not the best use of your resources.
Some of the top 3PL lists found online don’t define third-party logistics correctly. That’s the first sign the list might be bogus.
As alluded to previously, one main 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, third-party logistics companies offer a wider range of services. By using 3PLs and fulfillment companies interchangeably, the company lists are marketing services that do not cover the entirety of what a business is looking for. If you’re new to business and the concept of using a 3PL service, you can easily get swept up in these lists if you lack a complete understanding of the process.
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 & inventory management, transportation, and other logistical services for businesses. Some third-party logistics companies even offer complete supply chain management services.
Some of the services third-party logistics providers offer include:
Third-party logistics is one of the most essential aspects of any business, but it’s also one of the most difficult 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 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. For more info on the definition, click here.
Using a 3PL reduces logistics costs by streamlining operations to improve delivery times and enhance overall supply chain efficiency. Reputable third-party logistics providers can quickly scale operations up or down to match business needs, making them ideal for growing companies or those with seasonal demand fluctuations.
When we talk about true 3PL companies, we’re looking at the industry pros who provide more than shipping stuff out for your brand. They manage the entire freight show, both inbound and outbound.
Some of these companies own trucks and warehouses, making them an asset-based provider. Others are more like middlemen, with a Rolodex full of relationships with different carriers they turn to for transport. No matter which way you go, you’ll get far more services than what your typical fulfillment center offers, including:
Most 3PLs can adapt to whatever level of help you need, so don’t be afraid to ask. Maybe you just want them to handle one aspect of your shipping or the whole enchilada. Either way, 3PLs make your supply chain smoother, more visible, and ultimately, better-performing.
Outsourced 3PL logistics can work with transportation, global shipping, and information technology. On transportation, 3PLs can help with LTL or FTL, engaging carriers, or tracking insurance and freight payments. This can lower transportation costs and increase efficiency.
3PLs can also deal with customs, freight forwarding, and consolidations. Managing ecommerce and operations with outsourced logistics is often done through EDI, API, and cloud-based systems to further increase supply chain visibility.
In addition to shipping and logistics services, 3PL warehouses (third-party warehouses) either lease or own warehousing facilities, which are used to store goods. Products are typically stored in bins, on pallets, and in racking, although goods can also be stored on the floor.
Warehousing services include, but are not limited to, receiving orders from a business’s customers, locating the required products from inventory, preparing the client’s order for shipping, and ensuring the product is shipped to the correct location with the correct documentation and packaging.
Receiving the orders from the business’s clients can be via online ordering systems linked to the warehousing services computer inventory systems or by various other methods depending on the business’s capabilities. Businesses may do their ordering via call centers, catalogs, or strictly through their website.
Locating the products is done either electronically, by hand, or by heavy equipment depending on the products being ordered and the facility’s capabilities. Some orders may use different methods even for the same client.
Preparing the orders for shipping can be done either electronically, by hand, or a combination of the two, determined by the quantities being processed and the conditions required by the product. Some products may need special handling depending on fragility or size.
Product shipping includes managing the shipping methods used or required contingent on the client needs and the product itself. Managing electronic tracking procedures and quality control to effectively diminish and report errors. Also, this includes the client specified shipping methods and special procedures requested.
More warehousing services may be offered based on the warehousing company’s capabilities with regard to manpower, space available, and implemented technologies. The above services are fairly universal when it comes to warehousing companies in general as far as the minimum services they should be able to provide.
Businesses looking into an outsourced warehousing company solution should understand their wants and needs to ensure the company can provide for their clients in a satisfactory manner.
A Full-Service warehouse will offer many different possibilities for your small or growing business. Generally, a full-service warehouse will do more than just simply store your goods. They will perform all of the additional services needed to ship your goods to your end customers. What else does a full-service warehouse do?
Understanding what things warehouse services have to offer can help you make the right decision on which warehousing company is right for your business.
A public warehouse stores your goods for a limited time and works with multiple companies within the same warehouse space. They provide you with space and handle all of the fulfillment and shipping if needed. Furthermore, public warehouse services store goods and products for multiple clients in the same warehouse. A contract warehouse handles the shipping, receiving and storing of goods on a contracted basis and oftentimes uses the entire warehouse space for one single client. Because the space is dedicated to a single customer, contact warehouses do not typically manage multiple clients at the same location.
Getting started in e-commerce or expanding your business introduces the concept of 3PLs and fulfillment services. Both play a crucial role in getting your products to customers. However, they’re not the same. Understanding the difference between them helps with your business strategy planning.
Fulfillment companies typically focus on storing your inventory, processing orders, picking and packing items, shipping products to end customers, and handling returns. Think of them as the people who make sure your customers get what they ordered when they ordered it.
Here’s where the confusion comes in. A third-party logistics provider can do all those things as well. However, they offer a wider range of services that cover more of the supply chain:
Reverse logistics have taken the lead in the race to prove which 3PL services are among the best. Once discounted as the back half of the supply chain equation, the unique demands of Gen Z consumers have thrust it into the spotlight.
Now an integral component of B2B and B2C businesses, choosing a 3PL that prioritizes reverse logistics helps organizations improve the customer experience by boosting efficiency and lowering costs.
The annual Third-Party Logistics Study includes the following as part of reverse logistics:
Data in the study reveals that diversity in the returns experience significantly impacts customer loyalty. Roughly 65% of consumer-focused shippers and 60% of business-exclusive shippers indicated the return expectations of their customers are increasing.
Consumers – particularly Gen Z – expect their online shopping experience to include options for buying and returning items anywhere, at any time. Quick and free delivery is trumped only by the desire for free and easy returns.
Choosing a 3PL provider that aligns with your business goals can reduce costs while improving logistics operations.
Smart business owners know they can gain a competitive edge by partnering with a reputable third-party logistics service. Companies of all sizes benefit from 3PL’s specialized expertise and advanced technology without the need for significant financial investments in infrastructure or personnel.
Besides cost reduction, some other reasons to use a 3PL include:
Different products have unique storage and handling requirements, and leveraging third-party warehousing can help businesses ensure these needs are met efficiently and cost-effectively.
Third-party logistics companies offer a range of services that streamline supply chains, increase efficiency, and save valuable time and money. They also provide expertise in supply chain logistics, allowing your business to receive reliable assistance managing and distributing products.
True 3PLs provide the technology, facilities, and services you need for product distribution. They’re also proficient in international shipping and flexible technology, allowing for global growth.
If you’re not a logistics expert and still want to be successful in your business, consider hiring a third-party logistics company. They handle various aspects of the shipping process, including receiving goods from suppliers and delivering them to customers.
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. They already have a well-established network of warehouses, advanced technology, and trained staff. They can keep track of a package from start to end and readily overcome international shipping issues. Plus, their credibility depends on delivering packages to the right place, at the right time, and in proper condition.
When you outsource your company’s shipping and logistics, you gain the advantage of a partner who can connect to your existing infrastructures. The 3PL provider can manage all aspects of your logistics seamlessly. They connect with your ERP software, POS system, sales channels, and other critical systems for daily operations.
Instead of worrying about infrastructure or software, you can focus on running your business. A 3PL company can automate processes like tracking inventory levels at each location and communicating with carriers to track shipment destinations. Leaving these tasks in their capable hands increases your efficiency, reduces waste and errors, and boosts your profitability.
The single greatest reason to consider working with third-party logistics providers is cost savings. By outsourcing with a 3PL company, you can achieve lower storage and fulfillment costs (by making these costs variable, rather than fixed monthly storage and labor costs). Since 3PLs leverage the aggregate shipping volume of all clients, they can get lower shipping costs than what you could secure on your own.
Other ways they reduce costs:
Making your customers happy with efficient shipping is the heart and soul of keeping your business afloat long-term. Especially if you’re a startup, you don’t want shipping mistakes that set you off on the wrong foot. In today’s world, you need the fastest shipping procedures you can find to keep up with customer demands.
By keeping your logistics running optimally, your customers will deem you reliable rather than assuming improvement later. Most customers don’t give those second or third chances.
Many of the complaints about 3PLs involve lackluster customer service. Before you sign on the dotted line with a third-party logistics provider, verify they offer expertise in this area. A 3PL that prioritizes customer satisfaction can help you improve your services. They also have beneficial relationships with other companies.
You should communicate frequently with your 3PL provider. When there are problems or questions, they can get answers or find solutions quickly because they understand each aspect of the supply chain process and how to communicate across multiple steps if necessary.
Warehousing companies can increase consumer satisfaction in two ways. It will allow you to focus on your core business activities and ensures efficient delivery. Many companies want to focus on what they do best, which isn’t shipping and warehousing.
That’s why keeping your focus on in-house warehousing activities will undermine your abilities to deliver core services. For example, an online t-shirt printing business can focus on creating better and new t-shirt designs and strengthen product quality if it outsources the shipping to a third-party logistics company.
Plus, owing to their extensive resources and well-trained staff, a 3PL warehousing service provider ensures risk-free and timely delivery to your consumers. You can also get a host of value-added services such as repacking, gift-wrapping, sub-assemblies, and just-in-time services to improve your consumer satisfaction considerably.
Setting up a comprehensive inventory management and shipping system requires you to create a network of warehousing companies, couriers, and shipping centers across the globe, especially if you are going to serve a global clientele.
It is not only expensive but also time-consuming. A third-party warehousing company, however, has access to a vast network of resources to meet your daily shipping and warehousing demands immediately.
A 3PL warehouse can quickly integrate your supply chain into the markets where your business doesn’t have an established presence. Thus, it offers better delivery coverage compared to your in-house warehousing system at a lower cost. You can grow your business without diverting your financial resources.
Many online businesses have to scale up and scale down their operations according to the market fluctuations. Your business will experience many busy and slow times during the year. For example, your order volume will increase during the holiday season.
Usually, a third-party warehouse service provider will allow you to scale space, labor, and transportation according to your current inventory. Thus, you can rent out more warehouse space during the holiday season and less space during off-seasons. They also offer freight or cargo consolidation.
As your company continues to grow, you need to have the proper space and equipment to deal with your expanding inventory. A warehousing company provides this for you so you don’t have to invest your own money. However, it’s always important to thoroughly vet your 3PL warehouse first to assure they’re continuously scalable for your company.
When you need more shipping flexibility as well, third-party warehouses can provide it without barriers. Almost all warehouses have locations in strategic places for decentralized distribution.
Along with the networking, you’re gaining valuable expertise using a 3PL warehouse. All outsourcing gives you experts who know what they’re doing, so you gain a stronger competitive edge.
With business being more competitive than it ever has, you need a staff who understands the latest technologies and inventory management procedures.
We’d be remiss if we didn’t discuss the disadvantages of using a third-party logistics provider. Yes, there are many advantages, but that doesn’t mean they’re the right fit for every business.
One of the biggest drawbacks is losing personalized experience. You don’t know the individuals handling your products, so there is a certain level of disconnectedness, especially if the 3PL is lacking in communication.
Other cons include:
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 outsourced logistics service providers in a localized geographical area won’t meet the requirements set out by those companies.
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, most 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, most 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 with the best 3PL providers for small businesses.
3rd party logistics companies are used by businesses of all kinds, from small mom-and-pop shops to huge corporations. They provide various services and specialize in each phase of the supply chain, assisting businesses with everything from procurement and transportation to warehousing and delivery.
Some businesses use a 3PL company because they don’t have the resources or expertise to handle all aspects of their supply chain. Others use outsourced logistics companies to outsource certain tasks that they don’t need to do themselves and want done correctly.
Each 3PL company has different rates that they charge. The main 3PL costs you will encounter are initial setup, receiving, storage, fulfillment or “pick and pack”, and shipping.
The average setup fee is around $550, but if a provider focuses on helping smaller businesses, the lowest initial setup fee will be around $120-$150. This fee includes 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 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. Each pallet has a storage fee of 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 3PLs charge 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 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 the largest fees is shipping charges. Shipping costs are based on the volume of packages. Extra fees could be applied if you are looking to ship through your 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 retail rates, and the Cost Plus model adds a percentage market up to the shipping cost.
Will using a third party logistics Warehousing company save my business money? The answer is it absolutely can. However, you must do two things to ensure that you’re getting the best prices and making a proper comparison. First, you must make sure that you look at all costs involved in doing it in-house. Frequently, companies don’t think of all of the costs involved.
For example, do members of your management team spend time on these functions? If so, you have to make sure you’re incorporating this into the equation. Second, you’ve got to make sure that you use the bidding process to your advantage. Making warehousing services compete for your business enables you to be sure you’re getting the best rates possible. That’s where we come in! We help connect you with multiple, competitive, FREE Quotes.
A great number of product-based businesses consider outsourcing to a third party warehousing company as a viable option for handling the warehousing and distribution of their product. But once they begin researching these third party warehouses, they often get hit with “sticker shock” in terms of storage and fulfillment fees. They often think to themselves, “Is it cost effective to outsource?”
Or better yet, “Will cost savings be realized by outsourcing warehousing and fulfillment?” These are extremely important questions that need to be analyzed from a detailed financial perspective in order to gain appropriate insights and make the best decision.
One of the most difficult aspects of any in-house versus outsourcing financial analysis calculations is the gathering of ALL “in-house” costs. If any of these costs are left out of the equation, you’ll surely not be able to gain the proper perspective in your decision. What kinds of costs need to be included?
Some of the most commonly overlooked areas are equipment purchases and adequate measures of management support related to the fulfillment process. Without a thorough analysis, you’ll potentially be left thinking that outsourcing isn’t the best option when in fact, using a third-party warehousing solution would be the best way to go.
In addition to forgetting to include certain in-house costs, another common mistake is not accounting for other added benefits of outsourcing your third party warehousing. Some of these “intangibles” can really provide significant savings. They include:
Properly accounting for all costs and benefits will help you make the best decision regarding the use of third party warehousing. Don’t be short-sighted when looking at the pricing proposals from warehousing companies. Take into account all costs, and you’ll set your business up for the greatest success possible.
How much weight do businesses put into these best 3PL companies lists? According to the experts we talked with, not much.
“Lists of the best 3PL companies may only tell you some of what you need to know,” said Eliot Vancil, CEO of Fuel Logic. “These lists often focus on significant companies and leave out smaller, more specialized 3PLs that might be better for your business.” Vancil cautions there are many choices besides the big players. He urges businesses to think about things besides a 3PL’s size and image “Don’t just look at the lists. Finding a 3PL that works with your business and meets your goals is the only way.”
Andrei Vasilescu, co-founder and CEO of DontPayFull, said choosing the best 3PL provider extends beyond generic rankings. “It’s essential to consider your business’s specific needs, such as industry expertise, flexibility, and scalability. Prioritizing personalized service can lead to significant benefits.” In his experience, Vasilescu said tailored solutions have increased operational efficiency by 20% and reduced shipping costs by 15%. “Look for 3PLs with a proven record of on-time delivery, as this boosts customer satisfaction and retention.”
Eli Itzhaki, CEO of Keyzoo, said when he was ready to partner with a 3PL, he started by asking for referrals from colleagues and industry friends. “I wanted to hear about their experiences – good and bad. I got a list of about 5 potential 3PLs, then I started digging deeper.” He visited the websites of the 3PLs on his shortlist, read reviews, and checked their certifications. “I was looking for a partner that shared our values and had a proven track record of reliability and accuracy.” Itzhaki then asked for customized proposals from each, which he used to narrow his list down to two possibilities. During scheduled meetings with the two remaining options, he asked questions about contingency plans for natural disasters and how they handled inventory discrepancies. “The deciding factor was their willingness to adapt to our specific requirements,” Itzhaki said. “We have a lot of custom orders, and our products require special handling. It wasn’t just about warehousing and shipping; it was about finding a partner that cared about our customers as much as we do.”
Jen Seran, director of business operations at Stallion Express, advised businesses not to forget about the importance of customer service when choosing a 3PL. “A 3PL partner who is responsive and proactive can make all the difference in fixing problems and ensuring your customers get their goods on time.”
When choosing a 3PL company, the compatibility of your business with their services is the most important criterion. The technologies used by the 3PL, and their typical scale of operations must align with your organization’s pre-existing technology and business volumes for the best results. Prioritizing these two things helps the 3PL meet all your needs seamlessly.
A 3PL company’s previous performance and customer relations should also weigh heavily on your decision.
Like most business services, third-party logistics company outsourcing is risky. Here are the things we recommend you look for in a 3PL partner:
The number of 3PLs in business today is good and bad for companies with logistical needs. It’s great because there are many reputable companies offering competitive prices and fighting for your business. It’s just not so great when you’re trying to isolate the best companies that can meet your needs. That’s where our network comes into play.
We help you secure quotes from the best 3PL companies that provide services in line with your company’s current needs. We do this free of charge, and we act quickly because we know you have deadlines to meet and customers to please. The top fulfillment companies we work with also understand that you demand advanced knowledge, proven processes, and dependability because you take your business just as seriously as they take their own.
That understanding and dedication to excellence and customer satisfaction is why they pass our rigorous testing process and are included within our carefully selected network of third-party warehousing companies.
Analyzing 3PL company strengths and weaknesses is necessary if you want to find one that works well with your niche industry. If you’re new to searching for warehouse companies, you may think all fulfillment centers are alike. They really aren’t, and many have designs for specific companies. You may even find a few that say they’re suited for specific industries when they really aren’t.
Just like you would for any business, proper vetting helps you choose the right warehouse for your company. Doing this only helps yourself since having a good relationship with your 3PL warehouse is important to keep working with them long-term. You don’t want to have to switch to another warehouse service midstream just because you didn’t take the time to study the pros and cons.
So, what are the biggest strengths and weaknesses you might encounter in a 3PL during the vetting process? Almost all of them have good and bad elements, though weaknesses can sometimes mean something positive.
Management principles in most 3rd party warehouses have various strengths and weaknesses. The most critical thing to find is whether the management in your warehouse has real vision for the future. Are they willing to tailor their services for your company structure?
If management treats their warehouse like a commodity service, it’s best to move on to another. It’s a must to have management with the intent to expand and continuously update their technology to keep up with demands.
Also, check into how centralized the management is. When or if they expand to other geographic areas, management could become more decentralized and cause more logistics confusion.
A third-party warehousing company that doesn’t invest in the latest warehouse technology obviously shows a major weakness. Most warehouse services do, though you have to make sure they’ve streamlined it and integrated it into every department.
Top-tier technology is only as good as how it’s used, and having examples of how the 3PL warehouse uses it can help you get faster answers on their strengths. More so, you can determine whether they keep up with the latest tech updates so they know what to invest in down the line.
How much training has the warehouse company given to their staff lately? Do they update training regularly, or do they wait several years before new training takes place?
A staff that’s continually learning is a benefit to the warehousing company you work with because they’ll know every procedure without having to ask questions. Any employee with confusion on how to operate technology only leads to downtime. That can’t happen in a warehouse where speed is mandatory to keep pace with shipping demands.
Make sure your third party warehouse has capable people working, including proper safety training to eliminate any risk of injury.
Do you know exactly where your 3PL’s location is? Many of the best ones are near major ports, highways, and airports. If they’re in a more remote area that takes an hour longer to get to transport service, it can matter in how fast a delivery takes place.
Geographic location also matters in any potential risk or danger from nature. Is the warehouse in an area where hurricanes frequently occur? A warehousing service in Southern California may have risks from earthquakes.
These strengths and weaknesses can help you form a backup plan if something were to happen. Asking your 3PL warehouse if they have a disaster recovery plan in place is just as important as asking about management, costs, or technology.
Choosing the right 3PL company can be a challenge. You want to find a company that can meet your needs, but many factors must be considered. When choosing a 3PL, avoid these mistakes:
There are hundreds – even thousands – of 3PL providers operating in North America and around the world. Some specialize in select services, while others offer a long list of customizable options. Some cater to specific industries or goods, while others are global companies supporting businesses across all sectors. The sheer volume of options makes thorough research and comparison challenging.
When choosing a 3PL Warehouse company on your own, we highly recommend keeping the following points in mind:
You can use these top 3PL lists for introductory information, but we recommend a more targeted approach. The 3PL network at Warehousing and Fulfillment provide curated and relevant options tailored to your business needs.
We’ve done the hard work for you by:
Don’t leave your logistics operations to chance. Contact us to begin the process of requesting quotes from multiple 3PL providers online.
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 third-party logistics 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 closer you are to your customers, the less they will pay for shipping. 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, 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 a centrally located 3PL warehouse or 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.
Finally, for some businesses, minimizing inbound freight costs is most important. In this case, locating a third party warehouse near the closest inbound port is the best course of action. By minimizing inbound freight costs, which can be significant, overall costs of third party warehousing become manageable. However, when using this approach, thought must be given to outbound shipping costs (unless this cost is being passed onto end customers).
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. American 3rd party logistics companies are some of the most popular 3PLs in the entire world, but there’s a lot of planning involved in selecting logistics companies in the USA. Below are the top locations in the US for 3PL Companies:
If you’re looking for a 3PL company in Canada, you may wonder where to begin. When choosing a business location, you should consider the cost of living, available workforce, and proximity to major transportation hubs. Here are the top locations in Canada for 3PL Companies:
Toronto is a great place for outsourced 3PL services, 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 much growth lately, thanks to its location between Toronto and Niagara Falls.
Outside of the Greater Toronto area, Vancouver offers Canada’s second most popular 3PL company location 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. Another popular option for 3PL companies is Montreal, Canada. For eastern Canada, Montreal is a good option.
The best way to find 3PL warehousing and fulfillment centers near me! Select the desired area below and get matched with the top 3PL warehouses today!
Transitioning to a third-party warehousing partner can drastically improve your logistics and enhance your operational efficiency. To ensure a smooth and successful shift, follow these practical steps:
We can help you find the best 3rd party warehousing company with the best pricing for you. Members of our management team used to work in the Logistics industry, so we know what to look for in a provider. We’ve pre-screened 3rd Party Warehousing firms so that you can get multiple quotes from quality vendors. But you might be asking yourself why should I use a Warehousing company instead of doing all of the distribution, warehousing and shipping myself? And will it really save my company money by outsourcing? What kind of rates do these companies charge? Thankfully, we can help you answer these questions.
Should you use a Warehousing Storage organization to store and ship your goods for you? The main question here involves strategy. Is the supply chain the most critical component of your business? Is it a source of competitive advantage for you? If so, you may not want to outsource. Rather, it might be best for you to pursue Warehouse Rentals, obtain a commercial lease of warehouse space, and perform the logistics yourself.
However, if you’re like most companies, distribution is important, but it’s not your source of competitive edge. These days many 3PL warehouses offer solutions that are extremely high in quality and extremely low in error rates. And by outsourcing, you won’t have to think so much about the storage and shipping of your product. You can spend more time on trying to grow your business.
First, most 3PL companies claim that they will do a great job for you, even if they don’t operate at a high level for other clients. It’s usually very difficult to find out how well a 3PL performs without a thorough knowledge of the industry and an understanding of the things that you must look for in a provider. Second, other “referral” sites claim that they can connect you with top 3PL firms.
The problem, as we found through independent research, is that they don’t actually screen the companies. The truth is that our company is one of a kind in that we don’t allow every 3rd party warehousing company into our network. Rather, we conduct a thorough 5-point analysis before we accept a 3PL into our network. Most companies that we speak with don’t make the cut. You’ll be connected with high-performing warehouse companies.
Instead of searching through website after website, making calls to each of your chosen providers, and then trying to gauge their respective offerings and make an ultimate decision, we make the process fast and easy. Simply fill out one simple form, and we’ll take your information and connect you with the most relevant and reputable providers that can meet your needs.
You receive price quotes from 3PL warehouses within hours, and you’ll have the peace of mind of knowing that each provider has been pre-screened by former 3PL executives. Perhaps best of all, our service is FREE to you and there is no obligation to use any of our providers.
We use objective screening criteria to identify the best warehousing services. Many other referral companies simply sign up any 3PL warehouse that is willing to pay them, or they rank 3PL’s in order of who will pay them the most money. We simply don’t use any of these deceptive practices.
Rather, we remain fully unbiased. And we don’t collect any commissions from our third party warehouses. Instead, they simply pay us a small per-lead fee each time we introduce them to a prospect like you. That way, you don’t have to worry about them increasing their service prices to you in order to cover commission payments.
We know exactly what to look for in a quality provider because members of our team used to work in the 3PL industry. We gained valuable experience and thus have the knowledge to understand your unique needs and connect you with providers that will not only do a good job but will also be able to perform the specific services you require.
We understand that many people don’t understand the industry on the whole and need a resource to help them navigate the complicated landscape. We’re not only here to provider you with references for quality providers, but also as a resource for questions that you have about the 3PL industry on the whole. And for those of you who do understand the industry, we’re able to easily and quickly connect you with quality providers that have passed through intensive screening.
Since we’ve been providing quality referrals since 2005, we have had time to develop relationships with top-notch 3PLs all throughout the US, Canada, and the UK. We have an unmatched number of providers, so we can connect you with options in all areas of these three countries. And if by chance, we don’t have an option for a particular remote location, we can reach out to our extensive network and find quality options quickly.
We help companies find the right warehouse service. No matter what your requirements (product, service needed, technology needed, location, etc.), we can narrow down a short list of companies for you to connect with and get free price quotes.
A 3PL company can be highly profitable for both the provider and its clients. For businesses, outsourcing logistics to a 3PL can lead to cost savings, improved efficiency, and the ability to scale operations without heavy infrastructure investments. For the 3PL provider, profitability comes from leveraging economies of scale, improving logistics networks, and offering value-added services that attract and retain clients.
3PL warehouse companies manage e-commerce logistics by offering comprehensive services like order fulfillment, inventory management, returns processing, and shipping. They use advanced technology such as applying AI in logistics to ensure real-time tracking and efficient handling of products from the warehouse to the customer. 3PLs allow e-commerce businesses to focus on sales, marketing, and customer service. This allows businesses to enhance their customer experience when 3PL companies take over these crucial logistics tasks.
Amazon occasionally uses third-party logistics (3PL) providers to complement its wide logistics network. While Amazon has built a strong system of warehouses, transportation, and delivery services, partnering with 3PLs allows them to handle surges in demand, enter new markets, and manage specific logistics needs more efficiently.
Look for responsiveness and reliability as top priorities. Ensure they have clear and open communication channels, offering timely updates and solutions to any issues that arise. Experienced and knowledgeable staff are crucial, as they can handle complex logistics problems efficiently. You should also check for a solid track record of meeting client needs to ensure they can support your business effectively.
Pricing for 3PL services depends on the type and volumes of goods, required services, storage needs, and transportation costs. The best 3PL companies provide detailed quotes that break down these costs, allowing you to see where your money is going. Some may charge a flat rate, while others use a variable pricing model based on your needs and the complexity of your operations.
Warehousing, shipping, and logistics are typically managed by the third-party provider’s dedicated team. They coordinate everything from order fulfillment to transportation, ensuring that products are delivered on time and efficiently.
Industries such as e-commerce, retail, manufacturing, and pharmaceuticals benefit most from warehousing services. These industries rely on efficient storage, inventory management, and timely distribution to meet consumer demand.
Warehousing services commonly use technologies like Warehouse Management Systems (WMS), RFID, and barcode scanning for tracking inventory. These tools provide real-time visibility and accuracy in managing stock levels and order fulfillment.
Typical contract terms with warehousing companies include duration of service, pricing structure, inventory handling procedures, and liability coverage. Contracts may also specify minimum storage requirements and conditions for termination.
Warehousing services companies manage labor and staffing by using a mix of full-time, part-time, and temporary employees, especially during peak seasons. They also invest in employee training and use labor management systems to increase workforce efficiency.
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