Third-party Logistics (3PL)
Also known as: 3PL
Third-party logistics (3PL) is the outsourcing of warehousing, transport and fulfilment activities to a specialist external provider.
A 3PL provider handles logistics functions on a business's behalf — storing stock, picking and packing orders, arranging transport and managing deliveries — so the business can focus on its core activities. It lets companies scale distribution without investing in their own warehouses and fleets.
The trade-off is less direct control over the customer's delivery experience. Some operators choose instead to own their logistics: a marketplace that runs its own warehouses and delivery fleet across Peninsular Malaysia keeps fulfilment accountability in-house rather than relying on a 3PL, which can make service more predictable.
Frequently asked questions
- What is third-party logistics?
- Third-party logistics (3PL) is outsourcing warehousing, transport and fulfilment to a specialist provider, letting a business scale distribution without owning its own warehouses and fleet.
- What is the difference between 3PL and in-house logistics?
- With 3PL, an external provider runs your logistics; with in-house logistics you own the warehouses, staff and vehicles. In-house gives more control over delivery, while 3PL offers flexibility without heavy capital investment.
Related terms
Fulfilment
Fulfilment is the process of receiving, processing, picking, packing and delivering an order to the buyer after it has been placed.
Read definitionOutbound Logistics
Outbound logistics is the storage, handling and delivery of finished goods from an organisation to its customers.
Read definitionDistribution Centre (DC)
A distribution centre (DC) is a facility that receives, stores and quickly ships goods to customers or onward locations, geared for fast throughput rather than long-term storage.
Read definitionExplore related across the knowledge graph
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