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What Is a 3PL? A Complete Guide to Third-Party Logistics in the UK

What Is a 3PL?

3PL stands for third-party logistics. A 3PL provider is an external company that manages some or all of a business's logistics operations.

This can include warehousing, inventory management, order fulfilment, picking and packing, dispatch, returns and additional services such as contract packing.

For ecommerce businesses, a 3PL can effectively become an extension of the internal team, taking care of the operational work involved in getting products from the warehouse to the customer.

What Does a 3PL Company Do?

A 3PL can provide a range of services depending on the requirements of the business.
Warehousing and storage - Products are stored securely at the 3PL's warehouse, removing the need for a business to operate its own storage facility.

Inventory management - The 3PL receives, stores and tracks stock, helping businesses maintain accurate inventory information.
Order fulfilment - When a customer places an order, the 3PL processes the order, picks the required products, packs them and prepares them for dispatch.
Pick and pack - Products are picked from storage and packed according to the agreed requirements, including branded or specialist packaging where required.
Dispatch and distribution - Completed orders are prepared for collection and delivered to customers using appropriate delivery services.
Returns management - A 3PL can receive returned products, inspect them, update inventory and prepare suitable products for resale.
Contract packing - Some 3PL providers also offer additional services such as kitting, product assembly, labelling, gift sets and promotional packing.

Learn more about Speedpac's 3PL fulfilment services.

How Does 3PL Fulfilment Work?

A typical ecommerce fulfilment process looks like this:

Stock arrives → Stock is stored → Customer places an order → Order is picked → Order is packed → Order is dispatched → Customer receives the order

The 3PL manages the warehouse and fulfilment operation while the business can focus on areas such as sales, marketing, product development and customer growth.

What Are the Benefits of Using a 3PL?

Outsourcing logistics can provide several advantages.

Reduce the need to operate your own warehouse - A 3PL provides access to warehouse space, equipment, systems and logistics staff without requiring you to manage the entire operation yourself.
Free up your internal team - Instead of spending time picking orders, packing products and managing stock, your team can focus on growing the business.
Support business growth - A good 3PL can provide additional capacity as order volumes, product ranges and customer demand increase.
Improve operational efficiency - Specialist fulfilment providers have established warehouse processes designed around receiving, storing, picking, packing and dispatching products efficiently.
Access additional services - Some providers can combine fulfilment with services such as contract packing, kitting, assembly and returns management.

When Should You Consider Using a 3PL?

There isn't a single point at which every business should move to a 3PL. However, outsourcing may be worth considering if:

Your business is outgrowing its current storage space.
Your team spends too much time packing orders.
Order volumes are increasing.
Peak periods are becoming difficult to manage.
You need better inventory visibility.
You are expanding into new sales channels.
You need additional packing or assembly services.
You want to scale without operating a larger warehouse.

If you're considering outsourcing, our guide on when to outsource ecommerce fulfilment can help you assess whether the time is right.

What Is the Difference Between a 3PL and a Fulfilment Centre?

A fulfilment centre is the physical facility where products are stored, picked, packed and dispatched.
A 3PL is the company providing and managing the logistics service.
A 3PL may operate a fulfilment centre while also providing additional services such as inventory management, returns, distribution and contract packing.

What Should You Look for in a 3PL?

Choosing the right provider is important because your fulfilment operation directly affects your customers. Consider:

Warehouse location
Storage capacity
Fulfilment services
Inventory management
Technology and integrations
Scalability
Delivery options
Returns management
Contract packing capabilities
Customer service
Pricing transparency
Relevant industry experience

Read our guide to how to choose a 3PL fulfilment partner in the UK for a more detailed checklist.

Why Choose a UK 3PL?

For businesses serving customers across the UK, warehouse location can play an important role in distribution.

Speedpac operates from Wellingborough, Northamptonshire, providing fulfilment, warehousing and contract packing services to businesses across the Midlands and wider UK.

The Midlands offers strong access to major UK transport networks, making it a practical location for businesses looking for nationwide fulfilment.

Why Speedpac?

Speedpac provides 3PL fulfilment, warehousing, order fulfilment and contract packing from its Wellingborough operation.

Services include storage, inventory management, pick and pack, order processing, dispatch, returns and additional packing services.

Speedpac also supports businesses that require services such as product assembly, labelling, filling, wrapping and kitting.

Explore Speedpac's 3PL fulfilment services. You can also learn more about Speedpac's contract packing services.

3PL FAQs

What does 3PL stand for? What does a 3PL provider do? Is a 3PL the same as a fulfilment company? Is 3PL suitable for small businesses? How much does 3PL fulfilment cost?

What does 3PL stand for?

3PL stands for third-party logistics. It means outsourcing logistics activities to an external specialist.

What does a 3PL provider do?

A 3PL can manage warehousing, inventory, order fulfilment, pick and pack, dispatch, returns and additional logistics services.

Is a 3PL the same as a fulfilment company?

A fulfilment company can be a 3PL. However, 3PL providers can offer a wider range of logistics services beyond basic order fulfilment.

Is 3PL suitable for small businesses?

Yes. A 3PL can support businesses at different stages of growth, provided the service and pricing model suit the business.

How much does 3PL fulfilment cost?

Pricing depends on factors such as storage, order volumes, picking, packing, packaging, returns and additional services.

Read our guide to 3PL fulfilment costs in the UK.

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Ready to Outsource Your Fulfilment?

If you're looking for a UK fulfilment partner to manage your warehousing, order fulfilment and logistics, contact Speedpac to discuss your requirements.

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