Contract logistics provider (CLP) services are mainly related to the movement of goods. They are not concerned with inventory management, warehousing, fulfilment, returns, etc. Both 3PL & CLP offer transportation, but their scope of services is too much different. 3PLs cover all the abovementioned services. Understanding the difference between 3PL and Contract logistics is quite significant because most people use these terms interchangeably, while they are not.

What is contract logistics?

Contract logistics is a term used to describe the service of transporting goods, from point A to point B, on behalf of another company. They can manage your delivery of goods. For example, they ensure that inventory is delivered to its destination while acting as the middleman between shipping companies and online retailers so that your company’s products are distributed smoothly across the supply chain. Contract logistics are not concerned with inventory management or e-commerce fulfilment.

How does contract logistics facilitate e-commerce companies?

They manage their transportation needs, negotiate prices, and plan optimized routes to get goods delivered faster and at an affordable price. As they are in the delivery management business purely, they have their transportation network and tie-ups with different logistics companies. Hence, it’s easy for them to handle the moving of goods for e-commerce companies compared to done by e-commerce companies themselves.

What are 3PL services?

3PL (Third-party logistics) services encompass anything related to storage, packing, fulfilment, returns, and logistics needs of e-commerce and dropshipping companies till the product reaches the end customer. Apart from that, it provides logistic and warehousing services to manufacturing companies in different ways.

Amazon FBA packing services by 3pls are also trending nowadays. Thus it takes away all the headaches of storage, administration and logistics from the entrepreneurs and gives them a lot of free time to focus on their manufacturing, sales, e-commerce, and business promotion activities. Thus it covers all the services provided by contract logistics providers (CLP) and offers much more.

Contract logistics vs. 3pl – Main differences

  • Stock Handling

Contract logistics companies only offer delivery and transportation while a tech-enabled 3PL offers both, transportation and a built-in inventory management system to handle your stocks. 3pl will receive stock from e-commerce or manufacturing companies and store it in their warehouses till delivery to the end customer.

  • Warehousing

Contract logistics companies do not offer warehousing services, their job is limited to moving the goods. 3pl provides complete warehousing solutions for your goods apart from moving goods from your location to the 3pl warehouse. Then 3pl takes the stock in their safe custody while enabling real-time tracking of goods for the real owner of the goods.

  • Retail Fulfillment

Contract logistics provider do not provide retail fulfilment services while 3pl provide retail fulfilment services to e-commerce, Amazon FBA and dropshipping companies.

  • Product Delivery & Returns management

Contract logistics providers can provide product delivery services but they do not pack your products, you will have to provide them with the goods in ready form. On the other hand, 3PLs not only provide product delivery services but also pick and pack your products. Further, 3Pl takes responsibility for the goods returns management also while the contract logistic provider does not provide such services.

How to choose between a Contract logistic provider and 3pl

If you have complete infrastructure facilities and manpower for storing, handling and maintaining the goods for a long time and you can pack and track your goods as well, then you can go for a contract logistic provider. Further, you should be capable of handling the returns also.

On the other hand, if you want to focus on the core business and look after sales and brand building then you should choose 3pl. Simply hand over your goods to them and forget the rest & yes, you can track your goods stored in the 3pl warehouse in real-time as and when you want.

CSG3PL – First and the best choice!

CSG 3PL Melbourne helps your company grow by providing best-in-class warehousing, e-commerce order fulfilment, Amazon FBA packing services, and logistics solutions for manufacturing companies, while you focus on your business. Their specialized multiple warehouses in Melbourne will ensure fast packing and timely delivery. Apart from all the above 3pl services mentioned in the article, you can get a lot of other Value added services also at CSG3PL.