.jpg)
The Indian e-commerce industry is predicted to grow five-fold to $300 billion by 2030, with third-party logistics or 3PL providers expected to handle 17 billion shipments in the next seven years, according to a report.
So how does a 3PL exactly work and how are they driving Indian E-Commerce? Let’s find out
Backbone of e-Commerce
Many logistics companies with their focus on e-commerce shipments have created a new business segment known as ‘e-Commerce logistics service provider’ to specifically cater to the industry.
And as the third-party logistics sector expands, the cost per shipment is projected to decrease by 23% from Rs 60 in 2023 to Rs 47 by 2030.
What exactly is 3PL?
Third party logistics refers to a layer in the supply chain that assists with logistics. Simply put, if a company manufactures a product and then delivers it directly to customers, that’s a 1PL.
Now if they involve shippers like DHL or FedEx, they have a 2pl. Finally, let’s say they supply a warehouse with their product, which then ships it to the customer on their behalf, this is known as 3PL.
And how do they do it?
3PL companies provide a complete package for online retailers. They procure the product directly from the vendor and try to deliver it within the least possible time.
During the entire journey of the product from retailer to end-consumer, the 3PL service provider is responsible for storage, maintenance, and time-bound delivery of the product.
What makes 3PL cost-effective?
Most products’ total prices include significant amounts of money spent on logistics.
Now since a third-party logistics provider handles every aspect of a shipment, from the first negotiation of prices to the final delivery, it enables a 3PL to secure lower rates for warehouse space, shippers, and domestic transportation suppliers and save a lot of money.
3PL’s penetration into quick commerce
3PLs are also shifting their focus to the burgeoning Quick-commerce industry. Renowned e-commerce and e-grocery brands like BigBasket, JioMart, Flipkart and BlinkIt have all relied on Zyngo EV Mobility, a 3PL, as their logistics-delivery partner.
Shadowfax Technologies, another 3PL, collaborates with online marketplaces such as Flipkart Quick, BigBasket and quick-commerce platforms like Zepto, and Swiggy Instamart.
Comments