3PL Logistics Warehousing Explained

The concept of outsourcing key business activities is nothing new and yet many Australian firms prefer to keep all of their logistical operations in-house. Although this can make sense for some, warehousing costs are not necessarily affordable, especially when you take into consideration the need to pick items rapidly at scale. Modern consumers expect to be able to place an order—usually online—and for it to be on its way to them within hours and sometimes minutes. Therefore, outsourcing such operations within a supply chain often makes economic sense. This is exactly what 3PL logistics warehousing offers. Read on to find out how.

What Is 3PL Logistics Warehousing?

To begin with, 3PL logistics stands for third-party logistics. In warehousing terms, it means being able to place your stock within a much larger facility than your firm might actually require. However, you only pay for the service you receive from the 3PL logistics warehousing supplier. The more you stock and the more movements of that stock there are, the more you would have to pay even if you run your own operation. What third-party warehousing operations offer is a significant economy of scale. Because the facility is shared with other clients, the heating, lighting and manpower costs are all diminished per unit. However, the real advantage lies in automation.

Automation in Third-Party Warehousing

Because robots can often do a much quicker job of picking, checking stock levels and handling goods than people, it makes sense for warehouses to run with this sort of automation technology. Imagine if one of your customers ordered a few items and your inventory could automatically allocate stock to their order, pick it, prepare it for despatch and send it on its way within minutes. With 3PL logistics running your warehousing operations, this could be a reality. Faster and more accurate picking ultimately results in higher customer satisfaction, more repeat business and, of course, growth.

Why Do Australian Firms Outsource Warehousing These Days?

To be clear, not all companies in Australia like outsourcing their stock management. Some prefer it to remain in-house under their direct control. For those who make the shift, however, there are few initial outlay costs to consider, unlike automating their own warehouse, of course. In addition to a low capital commitment, time savings are a big plus point. Many firms also cite the flexibility of such an approach which can grow at scale with a company's changing warehousing requirements. 

For more information about 3PL logistics warehousing, contact a local company.