.png)
-p-130x130q80.png)
In logistics, 3PL stands for third party logistics, where a company outsources services like warehousing, order fulfillment, and transportation to an external provider. A 3PL partner helps businesses streamline supply chain operations, reduce costs, and scale efficiently.
Third-party logistics (3PL) providers help businesses outsource warehousing, inventory, and fulfillment—reducing costs, boosting efficiency, and enabling scalability.
In this 2025 guide, we’ll explain what 3PL is, explore provider types, compare 3PL vs. 4PL vs. 5PL, and highlight key trends shaping logistics today.
Why it matters now: the global 3PL market is set to surpass $1.3 trillion by 2026, and over 86% of Fortune 500 companies rely on 3PL services. With growth projected to hit $2.4 trillion by 2034, it’s clear 3PL is more relevant than ever.
If you’re facing rising customer demands and supply chain challenges, this fully updated guide will show you how third-party logistics can drive cost savings, scalability, and growth in 2025 and beyond. It will help you:
Let’s dive in.
Third party logistics (3PL) providers play a crucial role in helping businesses manage warehousing, order fulfillment, and transportation more efficiently. In 2024, the global 3PL market surpassed $1.5 trillion, with strong growth forecasted through 2030, highlighting how outsourcing to a 3PL helps companies gain flexibility, reduce costs, and optimize their entire supply chain.
In business terms, 3PL is a supply chain model where an external company takes ownership of some or all of your logistics needs instead of managing them in-house. 3PL Services typically include:
By leveraging a 3PL’s network, technology, and expertise, you can scale operations without the capital investment of building your fulfillment infrastructure.
For a deeper understanding of how 3PL companies operate, check out What is 3PL?
As customer expectations for fast and error-free delivery grow, businesses are looking for ways to streamline operations without investing heavily in infrastructure. That’s where 3PL providers come in.
With warehousing space tighter than ever and shipping costs increasing, outsourcing logistics gives you access to an expert network, economies of scale, and the ability to scale quickly—especially during peak seasons.
Outsourcing logistics to a third-party logistics (3PL) provider can help your business scale efficiently and reduce operational costs. To choose the right partner, it’s essential to understand the main types of 3PL providers available:
These 3PL companies own trucks, warehouses, and equipment. They offer more control over physical assets and can provide consistent capacity and predictable pricing.
Instead of owning assets, these 3PL providers leverage networks of carriers and warehouses. This model allows for greater flexibility and access to a wider range of outsourcing logistics solutions.
Specialists in local and regional distribution, ideal if your operations focus on a specific area or multi-state region. They often have in-depth knowledge of regional regulations and delivery requirements.
Capable of managing logistics across the entire country. National 3PL providers can support high-volume distribution and complex supply chains at scale.
Focused on specific industries like food, automotive, or e-commerce. They bring specialized expertise and tailored solutions to unique supply chain challenges.
Offer end-to-end services, from warehousing and transportation to inventory management and fulfillment. These third-party logistics partners can handle your complete logistics operation under one roof.
Understanding these types of 3PL providers will help you select the best fit for your business goals and operational needs. By recognizing the strengths and specializations of each type, you can make more informed decisions that support efficiency, scalability, and long-term growth.
Choosing the right logistics company starts with understanding the differences between third-party logistics (3PL), fourth-party logistics (4PL), and fifth-party logistics (5PL) providers. Each model offers a unique level of control, integration, and strategic oversight for outsourcing your supply chain operations. Here's a breakdown:
Key takeaway: 3PL is hands-on and service-driven, while 4PL and 5PL are more strategic and data-driven.
When you partner with a third-party logistics (3PL) provider, you gain access to a wide range of services designed to streamline your supply chain. While offerings can differ between companies, most 3PLs deliver a core mix of operational support that includes:
Warehousing is one of the core 3PL services that provides secure storage for your products in ambient, temperature-controlled, or cold storage facilities. By outsourcing logistics to a 3PL company, you can scale your storage needs without investing in your own warehouse space.
Example: A food distributor uses temperature-controlled pallet storage to keep perishable products fresh before shipping to grocery chains.
Services:
Order fulfillment covers essential 3PL services such as pick-and-pack, packaging, labeling, and shipping. Outsourcing logistics ensures your customer orders are processed accurately and delivered on time.
Example: An online apparel brand relies on a 3PL to pick customer orders, pack them in branded boxes, and ship them directly to shoppers.
Services:
Freight and transportation management involves coordinating carrier relationships and selecting the best shipping options for your business. These 3PL services help you optimize delivery routes and reduce transportation costs when outsourcing logistics.
Example: A manufacturer uses a 3PL company to coordinate LTL shipments and track deliveries to multiple distribution centers nationwide.
Services:
Reverse logistics handles returns, restocking, and disposal of products that come back from customers or retail partners. By outsourcing logistics to a 3PL, you gain efficient processes that protect your brand reputation and recover value from returned goods.
Example: An electronics company partners with a 3PL company to process customer returns, test devices, and refurbish them for resale.
Value-added services include specialized solutions such as custom packaging, product assembly, and quality inspections. These 3PL services allow you to tailor your supply chain when outsourcing logistics to meet unique customer requirements.
Example: A cosmetics brand uses custom packaging and quality inspections to ensure products meet strict retail standards before shipping.
Services:
Outsourcing logistics to a third-party logistics (3PL) provider offers far more than just extra warehouse space. By leveraging 3PL services, businesses can unlock efficiencies, reduce costs, and deliver a better customer experience across every stage of the supply chain.
Outsourcing logistics to a 3PL company eliminates the need to invest in your own warehouses, hire full-time warehouse staff, or maintain expensive transportation fleets. In fact, over 90% of Fortune 500 companies now use at least one 3PL provider, highlighting how essential logistics outsourcing has become for cutting costs and improving service.
3PL services make it easy to scale operations up during peak seasons and dial them back during slower periods without the burden of fixed costs. This flexibility means you can respond quickly to market demands while maintaining operational efficiency.
With strategically located fulfillment centers, a 3PL company helps you reach customers faster across multiple regions. This wider network lowers your average shipping times and reduces delivery costs, strengthening your competitive edge.
3PL companies employ experienced logistics professionals and compliance experts who stay on top of regulations, carrier relationships, and best practices. Leveraging this knowledge reduces costly mistakes and ensures your supply chain runs smoothly.
A reliable 3PL service can connect seamlessly with your systems using WMS platforms, APIs, EDI, and marketplace integrations like Shopify or Amazon. This real-time visibility improves inventory accuracy and speeds up order processing.
Fast, accurate deliveries powered by professional 3PL services enhance your brand reputation and customer satisfaction. By outsourcing logistics to a proven partner, you can consistently meet delivery promises and improve repeat purchase rates.
3PL providers understand complex regulations, customs requirements, and carrier insurance policies. Their expertise in risk management protects your business from compliance issues and costly penalties.
Many 3PL companies offer kitting, custom packaging, labeling, and returns management as part of their 3PL services. These value-added options help create a smoother end-to-end experience for your customers.
3PL services often provide powerful analytics dashboards and reporting tools. Leveraging this data helps you track key performance metrics, identify trends, and make informed decisions to optimize your supply chain.
Here’s How It Works:
A growing DTC skincare brand partners with Buske to streamline fulfillment across the Midwest. Within months, delivery times are reduced by 40%, and order accuracy improves by 99%.
When should you consider outsourcing to a 3PL provider? If managing logistics in-house is starting to drain your time, budget, or customer satisfaction, it may be the right moment to partner with an experienced third-party logistics company.
You're likely ready for a 3PL when:
✅ Your team is spending too much time shipping orders.
✅ You’re running out of storage space.
✅ Order errors and delays are impacting customer satisfaction.
✅ You want to expand into new markets without investing in physical infrastructure.
✅ You need logistics compliance for major retailers (e.g., EDI, routing guides).
Understanding how 3PL pricing works is essential before you start comparing providers. Pricing structures vary based on the services you need, your order volume, and the complexity of your supply chain.
Expect pricing to be broken into:
Tip: Always ask for a detailed breakdown and check for hidden charges or volume minimums.
Check out our 3PL Pricing Guide for more comprehensive details.
When outsourcing logistics, pricing transparency is key. Yet, many top 3rd party logistics companies don’t disclose their full cost breakdown upfront. This can lead to unexpected fees, making it harder for businesses to budget effectively. So here’s a breakdown of the key cost factors that impact your 3PL expenses.
What it covers: The cost of storing your inventory in a fulfillment center. Fees depend on how much space your products take up and how they’re stored.
Common 3PL Pricing Models:
Buske Tip: Seasonal storage costs can fluctuate. Some 3PLs increase pricing during peak seasons—make sure to confirm this upfront.
What it covers: Labor for picking, packing, and prepping each order for shipment.
How it’s charged:
Pick & Pack Pricing Example:
If a 3rd party logistics (3PL) charges $2.50 per order and $0.50 per additional item, an order with 3 items would cost:
$2.50 (base order fee) + ($0.50 x 2 additional items) = $3.50 per order
Buske Tip: If a company fulfills over 1,000 monthly orders, ask about volume discounts—some 3PLs offer reduced rates at higher volumes.
What it covers: The cost of shipping your products to customers. This is typically the largest expense in 3PL fulfillment.
Key factors that impact shipping costs:
While almost every sector can gain value from outsourcing logistics, some industries see especially strong returns on investment.Partnering with an experienced third-party logistics provider can help you streamline operations, reduce costs, and meet unique supply chain demands with tailored 3PL services.
These sectors see the highest returns:
Deciding between managing your own fulfillment and outsourcing logistics to a 3rd party logistics provider can have a major impact on your business performance. Use this side-by-side comparison to see how each approach measures up in cost, scalability, speed, flexibility, and software integrations.
Choosing the right third-party logistics partner is one of the most important decisions you’ll make for your supply chain. Not all 3PLsare created equal, so it’s essential to find one that fits your goals, budget,and industry requirements.
Here’s how to pick one that aligns with your business:
When evaluating third-party logistics options, it’s essential to look beyond the sales pitch. Here are some common red flags—and real-life cautionary tales—to help you make a smart decision:
If your 3PL can’t handle surges in order volume, your business will suffer. One fast-growing eCommerce brand partnered with a small provider that couldn’t expand warehouse space quickly enough, resulting in a 6-week backlog during holiday launches. 3PL explained simply: scalability must match your ambitions.
Avoid providers without a warehouse management system (WMS) or real-time tracking tools. A health product company discovered too late that their 3PL relied on manual spreadsheets, causing inventory errors and lost shipments that cost thousands in refunds.
Watch for vague proposals or confusing fee structures. A retailer signed with a logistics partner promising “low rates,” only to be hit with surprise handling surcharges that wiped out their margins. Choosing a 3PL company with transparent pricing protects your bottom line.
Service level agreements (SLAs) are non-negotiable. A subscription box business trusted a provider that consistently missed shipping deadlines, driving customer churn and damaging their reputation. Make sure your 3PL has documented performance standards—and a track record of meeting them.
Poor communication is a major warning sign. One manufacturer struggled for months to get basic shipment updates because their 3PL didn’t provide a dedicated support contact. Responsive, accessible customer service should always be part of the package.
Technology is at the heart of modern 3PL services, driving efficiency, accuracy, and customer satisfaction. When outsourcing logistics to a third-party logistics provider, seamless integrations are essential to keep your operations connected and running smoothly.
Integrations link your sales channels, inventory systems, and fulfillment processes directly with your 3PL’s warehouse management system (WMS).
For example, connecting your Shopify or Amazon store means every order is automatically sent to the 3PL, picked, packed, and tracked in real time without manual data entry. This reduces errors, speeds up shipping, and improves the customer experience.
Robust integrations also enable ERP connectivity and EDI compliance, allowing your business to synchronize purchase orders, inventory updates, and invoices across multiple systems. Whether you’re selling on marketplaces, distributing wholesale, or managing B2B transactions, these connections ensure your supply chain data stays accurate and up to date.
By leveraging the right technology, third-party logistics providers deliver the visibility and automation you need to scale confidently and meet rising customer expectations.
See how partnering with Buske Logistics unlocked faster deliveries and scalable growth for real-world clients.
At Buske Logistics, solving complex logistics challenges is what we do best. One example involves streamlining distribution for a multi-location business struggling with long delivery times and inconsistent order accuracy. By consolidating shipments and optimizing delivery routes through our advanced analytics, we reduced average delivery speed by 2 days and cut returns by 15%.
For a leading beverage distributor facing frequent stockouts and fulfillment delays, we implemented a dynamic inventory management system and integrated real-time tracking. This solution boosted inventory accuracy to over 99% and scaled fulfillment capacity to meet seasonal demand without disruption.
These success stories show how outsourcing logistics to an experienced 3PL services provider can transform your supply chain, reduce costs, and deliver a superior customer experience.
For more on beverage-specific 3PL services, see our detailed guide on beverage warehousing.
For a deeper dive into the top 3PL providers for food logistics specifically, explore our guide on selecting the best food 3PL partner.
If you’re researching what is 3PL and weighing whether outsourcing logistics is right for your business, you’ve probably come across a few common misconceptions. Here are some of the biggest myths about third-party logistics—explained and debunked:
The logistics future is being shaped by rapid innovation and rising customer expectations. According to the Research and Markets – 3PL Global Strategic Business Report, the global third-party logistics market was valued at $1.1 trillion in 2024 and is expected to reach $1.9 trillion by 2030, growing at a CAGR of 8.5%.
This rapid expansion is driven by advanced technologies, shifting tariffs, and the increasing focus on outsourcing logistics as a competitive advantage.
Third-party logistics is evolving quickly and here’s what’s ahead:
Staying ahead means partnering with 3PLs that invest in innovation, data-driven strategies, and continuous improvement to keep you competitive in the years to come.
A 3PL handles outsourced logistics tasks such as warehousing, order fulfillment, and shipping.
A 3PL company takes care of the entire fulfillment process, including inventory storage, order processing, picking and packing, and shipping products to customers. They may also offer returns handling, freight forwarding, and real-time tracking.
Partnering with a 3PL company can reduce overhead costs, speed up delivery times, and simplify logistics operations. It also allows businesses to scale quickly and adapt to market changes without investing heavily in infrastructure.
A wide range of industries rely on 3PL services, including ecommerce, retail, healthcare, food and beverage, automotive, and consumer goods. Any business with complex or high-volume logistics needs can benefit from a 3PL.
Look for a 3PL company with a proven track record in your industry, flexible service offerings, advanced technology for tracking and automation, and strong customer service. Transparent pricing and scalable solutions are also key factors.
Leading 3PL services use warehouse management systems, real-time tracking tools, and integrations with eCommerce, ERP, and EDI platforms. These technologies give you visibility and control over every step of your supply chain.
Buske Logistics is a trusted 3PL provider with over 100 years of experience helping businesses simplify logistics. From FDA-compliant food warehousing to high-volume ecommerce fulfillment, we offer tailored, tech-driven solutions to support your growth.
Understanding logistics terminology is key to making informed decisions about your supply chain. This glossary explains essential 3PL terms you’ll encounter when outsourcing logistics to a third-party provider.
By now, you understand what 3PL is, how it works, and what benefits it can bring. Third-party logistics isn’t just a cost-saving tactic—it’s your long-term growth strategy. With the right 3PL partner, your business can move faster, scale smarter, and deliver better experiences to your customers.
Ready to scale faster with a trusted 3PL partner? Contact Buske Logistics to learn how our warehousing and fulfillment solutions support growing businesses across the U.S.
If you’d like to explore the best options available, check out our comprehensive list of the Top 3PL Companies for 2025.
Further Reading:
How to Choose the Right 3PL Provider
What is Reverse Logistics?
Ready to scale your supply chain? Contact Buske Logistics today →
.jpg)
