There was once a moment in eCommerce where the only thing businesses had to worry about when delivering products to consumers was whether to outsource or handle it themselves. As more consumers turn to eCommerce, there is increased demand for logistics companies. 

This increase in demand has brought about many terms in logistics like third-party logistics (3PL), fourth-party logistics (4PL), and contract logistics. The choices can be overwhelming, but to simplify it, we will discuss contract logistics vs. 3PL. And at the end of this post, eCommerce brands should understand what logistics type will best serve them. 

Contract Logistics Vs. 3PL: What Are They?

The more familiar you are with the eCommerce world, the higher the chances that you have heard the words “contract logistics and 3PL” used interchangeably. Both words “contract logistics and 3PL” have been used in place of the other quite often. Many even believe they stand for the same thing. While both concepts have the ultimate goal of delivering products to consumers, that is possibly where their similarities end. 

Contract logistics recognizes the importance of the various parts of the supply chain. The different parts make for a smooth transition. Contract logistics does not directly handle order fulfillment or ship products but focuses on the delivery process from production to delivery. The core purpose of contract logistics is the management of the delivery supply chain. 3PL stands for third-party logistics, and it is simply an eCommerce business outsourcing distribution, order fulfillment, or storage of products. 3PL enables eCommerce businesses to achieve more with an automated order fulfillment response. 

Different Features in Contract Logistics Vs. 3PL

If you are still unsure of the difference between these terms, it is understandable as both logistic services have varying capabilities. 3PL is more of a full-service option, as stated above in its definition, while contract logistics handles the management aspect of how a delivery supply chain runs. 

Differences Between Contract Logistics and 3PL

We can also look at the variations of both concepts from the following segments:

1. Inventory Management

The core focus of contract logistic companies is delivery and transportation management, while 3PL companies often have software that allows for real-time inventory management. The software that 3PL companies have allows a seamless run of the stock-keeping unit (SKU), product tracking, and ultimately analyzing inventory trends over time.

The analysis will determine the demand schedules of consumers and allow companies to effectively manage the use of their storage spaces. In contract logistics vs. 3PL, 3PL is better for inventory management. Worldwide Logistics Group is a global (3PL) freight forwarder focused on offering competitive and comprehensive solutions without compromising personal service.  You can visit their website to learn more.

2. Delivery Management

If your business is looking for a logistic service that covers delivery management, contract logistics is the way to go. Contract logistics services ensure that your business runs like a well-oiled train. 3PL companies also handle delivery management, but the presence of multiple fulfillment centers allows them to organize deliveries based on the location of a particular product.

3PL companies often partner with some carrier companies to ensure cost savings at every end. Considering that contract logistics companies are devoted solely to delivery management, they are a better fit for businesses with similar goals. 

3. Warehouse Management

Businesses that use 3PL’s have the guarantee that their products will be collected, packaged, shipped, and delivered in the best condition. 3PL companies often use warehouse management systems to track the progress of every product that comes into their fulfillment centers. The warehouse management systems of 3PL’s come with transparency plans that keep eCommerce businesses in the loop of product transport. 

4. Order Fulfillment Flexibility

3PL has order fulfillment flexibility that puts the businesses in charge of how and when products get to their consumers. The access to control of order fulfillment allows eCommerce brands to tailor the delivery process (SKU’s and product bundles) to their taste.

5. Real-time Shipment Tracking

Experts argue that as the popularity of eCommerce increases, so do consumer demands. For instance, the moment an order goes live, consumers stay refreshing the website to monitor the progress of their goods. It is almost as though consumers expect the same minute delivery. 

While same-minute delivery is not available yet, consumers can monitor their products with the real-time shipment tracking that 3PL provides. Consumer satisfaction is one of the ways to ensure these stakeholders return, and 3PL can guarantee that with their product tracking services. 

6. Tech Integration Availability

Tech integration can take your eCommerce business to the next level. Tech integration opens eCommerce brands up to multi sales channels, which are needed to grow a brand. Rather than spend funds on tech integration, 3PL companies can provide it as a package cost. Technologically oriented 3PL service providers can integrate their software with your eCommerce store and enhance order, inventory, accounts, and returns management. 

Which Should You Choose in Contract Logistics Vs. 3PL?

Choosing the eCommerce logistics service for your eCommerce business depends on the aspect of business you are focused on, the type of services you require, and your business expectation. A business that requires an all-hands-on-deck program to function, with a steady tracking system and goals of expanding in 5 years, is perfect for contract logistics services. 

On the other hand, if managing your business and handling product delivery takes too much of your time with no room for marketing, outsourcing to a 3PL is a better choice. 3PL’s are better for brands that are looking to grow within a short period. 

Conclusion

If your brand is focused on success within a short time and is already on that path, a 3PL company can help drive that goal. An example of such a 3PL company is YunExpress. YunExpress is a cross-border B2C and B2B logistics provider of professional standards. 

When you think of efficient, effective, and affordable shipping, think YunExpress. Their features include tech integration, warehouse management software, order fulfillment centers, and FBA (fulfilled by Amazon) programs. All these features are implemented in the YunExpress shipping packages to ensure that products reach consumers no matter their location at record times. Over 10,000 people can testify of the effectiveness of YunExpress. Visit their website and experience superb logistics serve like no other.