How to choose logistics services to optimize operations?

How to choose logistics services to optimize operations?

Large enterprises are advised to take advantage of 4PLs, while startups should operate their own logistics, and 3PLs are suitable for fast-growing companies.

According to Statista, the global logistics market is forecast to exceed $13.7 trillion by 2027. In which, 3PLs (third-party logistics) and 4PLs (fourth-party logistics) are popular logistics services that help businesses manufacturing and supply chain operations company.

In the context that more and more businesses are looking for logistics services, experts analyze the advantages and disadvantages of 3PL and 4PL. In addition, according to experts, in different business stages, businesses need to choose the right logistics model.

Specifically, when starting a business, businesses should be proactive in logistics activities by executing internal orders under control. However, when operating logistics on a small scale, it is often difficult for businesses to scale up because packing and shipping orders is a time-consuming task. Instead of operating logistics themselves without experience, businesses can upgrade by looking to 3PL logistics services.

The demand for end-to-end logistics services thanks to the boom in e-commerce and changing consumer habits has contributed to the growth of the third-party logistics market. Photo: freepik 

As businesses grow, businesses need more time to invest and market their products. Repetitive tasks with orders should be outsourced for better scaling. 3PL will help you optimize the fulfillment process including warehousing, inventory management, picking and packaging. At the same time, 3rd party logistics will cooperate with carriers to deliver products to customers. 

3PL logistics services include transportation management, warehousing and distribution, order fulfillment... The biggest benefit of 3PL logistics helps businesses focus on core competencies, save costs and improve services. customer service, market expansion. 

In addition, a form adopted by many fast-growing e-commerce businesses still uses 3PLs and has third-party logistics software to scale over time. 3PL service providers can help e-commerce companies from warehousing, shipping to profitability and customer service. Currently, e-commerce accounts for nearly 53% of the 3PL logistics market share.

 As companies continue to grow and expand, their demand for logistics services also increases. On a large scale, experts say that businesses should take advantage of 4PLs to maintain business operations. 

4PL is the management and implementation of complex logistics activities such as human resource management, control coordination center, integration of logistics activities... 4PL is developed on the basis of 3PL but includes broader areas such as information technology services or business process management. Accordingly, the management of the entire supply chain is a big aspect of the business, so partnering with a professional 4PL with solid expertise is a good choice.