What Is a 3PL? The Complete Guide to Third Party Logistics

Jul 15, 2026

Total Warehousing has been a third party logistics partner for local, national, and international companies out of our Atlanta facility since 1942.

We are here to help you learn everything you need to know about 3PL logistics: what it means, how it works, what services a 3PL like ours typically provides, what it costs, and how to know if outsourcing your logistics is the right move for your business.

What Does 3PL Mean?

3PL stands for third party logistics. In simple terms, a 3PL is a company that manages some or all of another business’s supply chain operations, usually including warehousing, inventory management, order fulfillment, and transportation.

Instead of a business handling its own logistics in-house, a 3PL logistics provider like Total Warehousing steps in as an outside partner. That means less time spent managing pallet counts, chasing carriers, and troubleshooting warehouse space, and more time spent on the parts of your business only you can run.

The “third party” in the name refers to the relationship structure. The first party is the manufacturer or supplier. The second party is the customer. The third party is the logistics company connecting the two, which is where we come in.

Why We Exist: A Short History of 3PL Logistics

Logistics outsourcing has been around in some form since the mid-1900s, when companies began separating transportation and storage from core manufacturing operations. We know this firsthand. Total Warehousing was founded in Atlanta, Georgia in 1942, and we have watched this industry evolve for more than 80 years, from regional warehousing to the complex, technology-driven supply chains businesses rely on today.

As global trade expanded and ecommerce took off, the demand for flexible, scalable logistics support grew right alongside it. Very few companies, especially small and mid-sized ones, have the resources to build their own warehouses, negotiate enterprise freight rates, or manage inventory systems on their own. That is the gap a 3PL fills, and it is the reason we have been able to keep growing our footprint in the Southeast for decades.

What Services Does a 3PL Provide?

Not every 3PL offers the same services, and this is where a lot of the confusion comes from. Some 3PLs specialize in one piece of the supply chain. Others, like Total Warehousing, offer a fuller range of warehousing, distribution, and transportation solutions under one roof. Here is what that typically includes.

Warehousing and Storage

3PLs operate warehouse space where they store inventory on behalf of their clients, often offering both dedicated and shared warehousing depending on volume and need. At our Atlanta facility, we manage more than 325,000 square feet of bulk and racked storage, with more capacity added as demand grows.

Order Fulfillment

Once an order comes in, the 3PL picks the product, packs it, and prepares it for shipment. This is the backbone of most ecommerce and retail fulfillment relationships and one of the biggest reasons businesses turn to a 3PL logistics partner in the first place.

Inventory Management

A good 3PL tracks inventory levels in real time through a warehouse management system, or WMS, that gives clients visibility into their stock without having to walk the warehouse floor themselves. We provide customer portal access so our clients can see inventory levels and activity whenever they need to.

Transportation and Freight

This covers the actual movement of goods, whether that is full truckload, less than truckload, or last mile delivery. Being positioned in the Southeast, close to the Port of Savannah, Port of Jacksonville, Port of Charleston, and Port of Mobile, and within easy reach of hubs like Charlotte, Orlando, and Nashville, gives our transportation services a real geographic advantage for clients moving freight in and out of the region.

Cross Docking and Just In Time Logistics

Cross docking allows products to move from inbound to outbound with little to no storage time in between, which keeps goods moving efficiently through the supply chain. We also support J.I.T., or just in time, inbound logistics for clients who need tightly timed deliveries to match production or retail schedules.

Kitting and Sub Assembly

Some 3PLs offer light assembly services, like kitting multiple products into a single SKU or custom packaging before an order ships. This is one of the value added services we offer to clients who need more than basic pick and pack.

Overflow Storage

Even businesses with their own warehouse space run into seasons where they simply run out of room. Overflow storage through a 3PL gives businesses a flexible release valve during peak periods without committing to a long-term lease on additional space.

Ecommerce Fulfillment Services

As more businesses sell direct to consumer, ecommerce-specific fulfillment has become a core 3PL service, covering everything from receiving and storage to pick, pack, and ship for online orders.

The Different Types of Logistics Providers (1PL to 5PL)

If you have been researching this topic, you have probably also come across terms like 1PL, 2PL, and 4PL. Here is a quick breakdown so the terminology makes sense.

• 1PL (First Party Logistics): The business handles its own shipping and logistics with no outside help.
• 2PL (Second Party Logistics): A company that owns the actual transportation assets, like a shipping line or trucking fleet, and provides that transport service directly.
• 3PL (Third Party Logistics): A company, like Total Warehousing, that manages warehousing, fulfillment, and transportation on behalf of another business.
• 4PL (Fourth Party Logistics): A provider that manages the entire supply chain strategy, often overseeing multiple 3PLs and vendors on a client’s behalf.
• 5PL (Fifth Party Logistics): A newer category focused on managing logistics networks at scale, often for multiple clients across ecommerce platforms, using heavy data and technology integration.

For most small and mid-sized businesses, a 3PL is the sweet spot. It provides professional logistics management without requiring you to hand over full strategic control the way a 4PL relationship might.

Who Uses 3PL Logistics Providers?

3PLs are used across a wide range of industries, but a few categories rely on them especially heavily.

• Manufacturers that want to outsource distribution without opening their own regional warehouses
• Retailers managing inventory across multiple sales channels
• Wholesale and B2B businesses shipping large or palletized orders to retail partners
• Businesses expanding into the Southeast that want a warehousing and transportation partner already positioned near major ports and distribution hubs
• Ecommerce brands that need fast, reliable fulfillment to compete with two day and next day shipping expectations

We work with companies at every stage, from businesses that have outgrown their own storage space to established companies looking for a more efficient regional distribution partner in Atlanta.

Benefits of Working With a 3PL

Lower Overhead Costs

Building your own warehouse, hiring a logistics team, and purchasing warehouse software is expensive. Working with a 3PL spreads those infrastructure costs across many clients, which usually means lower costs per order than trying to build it all yourself.

Scalability

One of the biggest advantages of 3PL logistics is flexibility. During peak season, a 3PL can absorb a spike in order volume far more easily than an in-house team working with fixed space and staff. Our overflow storage and flexible pricing solutions exist for exactly this reason.

Strategic Location Advantages

Location matters more than people expect. Being based in Atlanta and positioned near the Port of Savannah, Port of Jacksonville, Port of Charleston, and Port of Mobile, with close proximity to Charlotte, Orlando, and Nashville, allows goods to move efficiently across the Southeast and beyond.

Faster Delivery Times

Storing inventory closer to your customers reduces transit times, which is a major factor in customer satisfaction and repeat purchases.

More Time to Focus on Core Business

Perhaps the most underrated benefit: outsourcing logistics frees up internal time and energy to focus on product, sales, and growth instead of warehouse operations.

Potential Downsides to Consider

3PL logistics is not the right fit for every business, and we would rather be upfront about the tradeoffs than oversell you.

• Less direct day to day control over how orders are packed and shipped
• Onboarding time required to integrate systems and transfer inventory
• Communication gaps can happen with the wrong partner if reporting and visibility are not prioritized

We built our customer portal access and customer-first approach specifically to close that communication gap, because a 3PL relationship only works if you can see what is happening with your inventory at any given time.

How Much Does a 3PL Cost?

Pricing varies depending on the provider, order volume, and services needed, but most 3PL logistics providers charge based on a combination of the following.

• Receiving fees for inbound inventory
• Storage fees based on pallet, bin, or square footage
• Pick and pack fees per order or per item
• Transportation costs based on freight type, distance, and carrier rates
• Value added service fees for kitting, sub assembly, or custom packaging

We offer flexible pricing and solutions tailored to each client’s actual volume and needs, rather than a one size fits all rate sheet, so it is always worth having a direct conversation about what your specific supply chain requires.

How to Choose the Right 3PL Logistics Provider

Not all 3PLs are created equal, and choosing the wrong one can create more problems than it solves. Here is what we would tell you to look for, whether you work with us or someone else.

1. Location relative to your customers and suppliers. Fewer transit days generally means happier customers and lower freight costs.
2. Track record and industry experience. Total Warehousing has been operating in Atlanta since 1942, and we are proud members of organizations like TIA and IWLA that hold logistics providers to a higher standard.
3. Technology and visibility. Can you actually see your inventory in real time, or are you calling someone every time you need an update?
4. Scalability. Can they support you during peak season and as you grow, without major service disruptions?
5. Transparent pricing. Are fees clearly outlined, or are there hidden charges buried in the contract?
6. Security and accuracy standards. We provide 24/7 security monitoring and hold ourselves to high accuracy standards because our customers’ inventory is their business.

Is a 3PL Right for Your Business?

If you are spending more time managing warehouse logistics than growing your business, struggling to keep up with order volume, or looking to expand into the Southeast without the overhead of opening your own facility, a 3PL logistics partner is worth serious consideration.

Why Businesses Choose Total Warehousing

We have spent more than 80 years building our reputation as a third party logistics provider in Atlanta, and superior service has been the foundation of that reputation the entire time. Whatever your business needs, whether that is dedicated warehousing, order fulfillment, inventory management, cross docking, or transportation services across the Southeast, our team tailors our logistics solutions to fit your specific goals rather than forcing you into a generic package.

If you are ready to talk through what a 3PL partnership could look like for your business, request a quote and our team will get back to you in a timely manner.