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What is a 3PL?

If you own an e-commerce business, order fulfillment is an integral part of your business. As your business grows, you may find that fulfilling customer orders in-house is no longer feasible.

At that point, you need to expand your fulfillment strategy; for many companies, that means outsourcing order fulfillment to a third-party logistics company (3PL).

Third-party logistics (or 3PL) means outsourcing e-commerce logistics processes, including inventory management, warehousing and order fulfillment. 3PL providers allow e-commerce merchants to achieve more by having the tools and infrastructure to automate retail order fulfillment.

We don't know exactly who introduced the term "third-party logistics," but companies began leaning toward outsourcing inbound and outbound logistics services to third parties in the 1970s and '80s.

With the advent and growth of e-commerce in the 1990s and 2000s, the term 3PL became ubiquitous, and 3PLs expanded their services. The integration of warehousing and transportation services into the supply chain became what we now call third-party logistics.