In 2022, the global 3PL (Third-Party Logistics) market reached $1.2 trillion (source: GlobalNewswire). This reflects the growing demand for efficient storage units for products, including temperature-sensitive food and frozen meals.
For food companies, 3PL partnerships provide scalable solutions to handle peak seasons, minimize warehousing expenses, and ensure on-time deliveries.
This streamlined approach enhances customer satisfaction and supports long-term business growth and operational efficiency.
In this blog, we’ll discuss everything about 3PL services to help you understand the basics and how they can help food businesses minimize costs and enhance their operational efficiency.
What is a 3PL Warehouse?
A 3PL (Third-Party Logistics) warehouse is a facility managed by an external provider that handles various logistics services, including inventory storage, order fulfillment, and distribution.
To better understand, consider a food manufacturer supplying products like frozen vegetables and ready-to-cook meals to multiple supermarkets.
For them, managing storage and deliveries in-house would require costly cold storage units/infrastructures, large staffing, and dedicated management. Instead, they can outsource these operations to a 3PL warehouse with built-in cold storage to save money.
The warehouses are equipped with advanced systems like Warehouse Management Systems (WMS) to track inventory in real time and ensure accurate order processing.
How Does 3PL Warehouse Work?
The journey begins with manufacturers shipping products to a 3PL warehouse. Once the inventory is received, it is logged into the warehouse management system (WMS) for accurate tracking.
Upon receiving the order, the 3PL warehouse team picks, packs, stores, and prepares the items for delivery. The next step involves shipping these orders from a central hub to other units, ensuring efficient distribution.
Benefits of 3PL Warehousing
According to the Logistics Bureau, companies working with 3PLs save an average of 13% on logistics costs.
Here are more benefits:
Faster Order Fulfillment
Speed matters in logistics. Delays affect businesses and damage reputations. With a 3PL warehouse, food businesses get optimized storage, packing, and shipping systems in place. Efficient processes reduce order cycle time, ensuring quick deliveries.
Scalable Storage for Every Business Size
Businesses grow and seasonal fluctuation may happen.
However, expanding or reducing warehouse logistics space is expensive and time-consuming when handled in-house.
A 3PL warehouse offers scalable storage solutions. Companies only pay for the space they use. During peak seasons, like holidays, you can easily scale up without disruptions.
Lower Operational Costs
Managing an in-house warehouse requires staffing, equipment, utilities, and software. Outsourcing to a 3PL provider eliminates many of these costs.
A well-run 3PL partner manages shipments and optimizes routes to minimize transport expenses.
Reduced labour expenses are additional benefits. The warehouse staff is managed by the 3PL, meaning fewer payroll obligations and reduced training investments.
Focus on Core Business Activities
Managing logistics requires time and energy. In-house teams may deal with inventory control, order errors, late deliveries, and warehouse management.
However, outsourcing allows businesses to shift focus back to growth activities, whether it’s product development or marketing.
Reduced Risk of Inventory Loss
Inventory theft and damage can cost businesses millions. According to the National Retail Federation, inventory shrinkage accounted for $94.5 billion in losses in 2021.
Storing goods in a 3PL warehouse can reduce these risks.
3PL providers invest in security systems, fire prevention protocols, and round-the-clock monitoring. Advanced systems also ensure accurate inventory counts, reducing errors and losses.
Access to Advanced Technology
Smaller companies may struggle to implement advanced logistics tools due to high costs. Partnering with a 3PL provides instant access to the latest supply chain technology without the investment.
This includes real-time inventory tracking, predictive demand forecasting, and route optimization.
Companies that use these advanced systems see improved order accuracy and quicker responses to demand changes.
How to Choose the Right PNF Distributor for Your Food Products?
Here’s what to consider when making the decision:
1. Industry-Specific Expertise
Look for a distributor with experience in handling food products, especially your items. Ensuring they maintain proper temperature control and compliance with food safety regulations.
2. Advanced Technology for Tracking
Real-time tracking and monitoring are non-negotiable in food logistics. Check if they’ve advanced systems like Warehouse Management Systems (WMS) to track your inventory at every stage. This reduces errors and ensures accurate deliveries.
3. Scalable Storage and Distribution
Food demand fluctuates seasonally. This is why it’s important to check your chosen 3PL’s flexible storage options. This will allow you to scale up during high-demand periods and reduce costs during slower seasons.
4. Efficient Cold Chain Management
Maintaining proper temperature during storage and transit is essential. Partner with 3PL which specializes in cold chain logistics. This ensures that products like frozen vegetables, dairy, and meats arrive fresh and on time, minimizing spoilage risks.
5. Cost-Efficient Operations
Evaluate a distributor’s ability to offer cost-effective solutions without compromising quality. Check their consolidated shipping to help you save on transportation costs while maintaining delivery reliability.
6. Strong Customer Support and Communication
Reliable communication is essential in managing time-sensitive food shipments. Ensure that they prioritize clear, proactive updates.
PNF Distributor: Your 3PL Warehouse Partner
PNF Distributor delivers seamless 3PL solutions by combining advanced warehousing, efficient coast-to-coast distribution, and tailored logistics services.
With expertise in temperature-controlled transport, order tracking, and import/export documentation, we ensure timely deliveries. Our ability to offer solutions based on clients’ needs allows businesses to optimize their supply chain and focus on growth.
Headquartered in Mississauga with a global reach, PNF Distributor is the trusted logistics partner for long-term success.
Ready to streamline your logistics? Contact us today to discuss solutions for your business needs.
Frequently Asked Questions (FAQs)
Is 3PL suitable for small businesses?
Yes. 3PL providers, like PNF Distributors, offer scalable storage and flexible pricing models that suit businesses of all sizes, including startups.
Where can I find a 3PL warehouse near me in Mississauga?
PNF Distributor in Mississauga offers 3PL warehousing with temperature-controlled storage and real-time inventory tracking. Reach out to us for more information.