What is 3PL? Whistl's Guide to Third-Party Logistics

With thousands of UK retailers searching for 3PL-related queries each month, outsourcing third-party logistics is a popular strategic move. In this article, we cover the benefits and drawbacks of 3PL, examples of best practice and what’s involved, helping you determine whether outsourcing is the right solution for your business.

But first of all, what is a 3PL and what does it mean? 3PL stands for ‘third-party logistics’ and refers to the process of entrusting a separate commercial entity (another business) to take care of your logistics processes.  A 3PL is an external company that provides comprehensive 3PL services, including warehousing, order fulfilment, and shipping. These processes include importing goods, reworking, warehousing/storage, picking, packing and distribution. An end-to-end provider such as Whistl will offer a wide range of services which can be added, including contact centre solutions, mail management, product sampling, print advertising services and even cross-border import and export support. Service offerings can be tailored to the specific needs of UK eCommerce businesses, ensuring scalable and efficient logistics solutions.

How does third-party logistics work?

Entrusting another business to handle your end-to-end eCommerce logistics, including receiving, storage, picking, packing, distribution, returns, and customer service, is a highly involved process.

• Setting up with a third-party logistics provider: The first stage is for the retailer to meet with the logistics company so the 3PL can review the retailer’s technical infrastructure, product range, delivery requirements, and any other unmet needs. The third party will consider the client’s business objectives and how the 3PL can help them meet their growth goals.
• Integrated third-party logistics - The second stage of how a 3PL works is the implementation process. This is when the logistics company’s IT team works with the retailer’s technical department to ensure the retailer's sales channels are integrated with the 3PL’s warehouse management system (WMS). This ensures both parties have transparency into stock levels, return rates, customer queries, and picking and packing speed and accuracy. Some providers go one step further and offer inventory management and reverse logistics to ensure the retailer avoids under- or over-stocking, thereby minimising waste and their carbon footprint. Fulfilment centres act as strategic facilities that enable efficient inventory storage, order processing, and distribution for eCommerce businesses.
• Once systems and processes are working in harmony, the retailer or the retailer’s supplier (second-party) will ship stock to the 3PL, at which point the logistics firm will begin determining the most appropriate storage locations and picking and packing methods. The benefit of utilising a WMS is that stock locations can be optimised based on which product types (SKUs) are most popular. Some 3PLs have their own warehouses, allowing them to customise and optimise fulfilment solutions for their clients' growth needs.
• When an order is placed, this generates a pick sheet or, if paperless, updates the warehouse team’s barcode scanners, allowing them to determine the product's pick location. The product is then taken to the packing area, where the shipping label is applied, and the parcel is ready for collection by the parcel carrier. This process includes the final-mile delivery, where 3PLs optimise the final stage to improve delivery times for customers.

Outsourcing delivery and supply chain logistics allows businesses to focus on their core competencies, rather than being bogged down by operational details.

What are the different types of 3PL?

Third-party logistics companies fall into four different key categories:

• Transportation-based 3PLs: With a core competency in transporting products, they can also offer a broader range of logistics services. They can either leverage the vehicles and sites of other firms or utilise their own. Transportation-based 3PLs often provide international delivery and international shipping, supporting global reach for businesses expanding into new markets.
• Warehousing and distribution-based 3PLs: Specialising in all aspects of storage and distribution, many warehousing-optimised 3PLs also help retailers with the importing and exporting of goods.
• Freight forwarders: 3PLs who specialise in freight forwarding typically leverage third-party assets and act as intermediaries between the shipping location (third or first party) and the carrier hub.
• Managed transportation 3PLs: Specialising in end-to-end logistics services, managed transportation providers specialise in delivery management and often offer a wider range of fulfilment solutions.

What are the latest trends in the 3PL market?

In recent years, there has been a rapid growth in demand for third-party warehousing, which has led the market to adapt with increased efficiency, such as microwarehousing, splitting inventory across different warehouse locations, crowdsourcing fulfilment, and automated storage and retrieval systems. Consumer demands for speed, accuracy, and sustainability have encouraged retailers and 3PLs to innovate in greener supply chains through reverse logistics and investments in robotics. 3PLs also help businesses manage peak seasons by scaling fulfilment capacity to handle increased order volumes without compromising service quality.

When is the right time to outsource with a 3PL provider?

While outsourcing with a third-party provider is a big commitment, it isn’t as capital-intensive as investing in a warehousing facility. As your online sales grow, you will naturally reach a point at which carrying out your order processing in-house becomes overwhelming; your building and staff resources will be stretched.

The best way to determine the right time to outsource is to compare the cost of doing it yourself with outsourcing, and to consider the extra time you and your team will have to spend on other areas of running your business while a specialist handles picking and packing your orders.

What is 4PL, or fourth-party logistics?

While a 3PL focuses on logistics, a 4PL manages the entire supply chain. While an eCommerce department or the retailer’s founders would typically serve as the central point of contact for a 3PL, a 4PL would usually serve as the central point of contact.

Knowing whether to work with a third or fourth party depends on the level of control you require and whether you need to develop certain elements of your logistics or your entire supply chain.

Is third-party logistics the same as eCommerce freight forwarding?

No, a freight forwarder typically focuses on moving goods from one location to another, whereas a 3PL handles storage, picking, packing, and distribution.

Some actionable tips to help you make that decision

At Whistl, we provide outsourced third-party logistics solutions to mid-market retailers and brands in a range of industry sectors. Before you decide whether to outsource key logistics processes, your entire supply chain, or retain these processes in-house, we recommend that you consider your long-term goals, current digital maturity and assess your seasonality of demand.

Take a close look at your customer feedback, and if there are any gaps in service quality that could be addressed by faster, more accurate order fulfilment, then outsourcing to a 3PL may be a viable option. Consider UK fulfilment and eCommerce logistics solutions designed specifically for UK retailers and brands to ensure seamless integration and growth.

Specialised 3PL Services for Different Industries

We understand that every industry has its own challenges when it comes to logistics and fulfilment. That's why we offer specialised services designed to address your unique needs, ensuring that you receive tailored solutions that support your growth and help you achieve your operational goals. We're not just another provider; Whistl partners with your business to provide logistics solutions that fit your business. 

For ecommerce businesses, efficient online order fulfilment is essential to meet customers' expectations for fast, accurate deliveries. We offer multi-channel fulfilment that seamlessly integrates with your sales channels from web stores and marketplaces to social platforms like TikTok Shop. This ensures that your inventory, orders, and returns flow smoothly across all platforms, helping you deliver a consistent customer experience while maintaining complete control over your fulfilment operations. We provide tailored solutions, so you have a partner that makes 3PL simple.

Our logistics services go beyond basic warehousing and distribution. You benefit from value-added services such as custom packaging, labelling, kitting, and even promotional support, with the opportunity to reach new prospects with solutions like inserts. We have examined the entire supply chain to offer solutions designed to enhance your customer experience and support your brand differentiation. Our support helps you respond quickly to changing market demands and seasonal peaks while maintaining high standards of service that your customers expect.

Other industries, such as beauty, electronics, fashion and pet goods, also rely on our specialised expertise for fulfilment services that address strict regulatory requirements, handle sensitive products, and manage complex distribution networks.

When you work with Whistl, you are leveraging industry-specific knowledge and advanced technology to streamline your supply chain, reduce costs, and focus on your core business requirements.

Ultimately, our ability to provide flexible, industry-focused logistics services, combined with seamless integration across multiple sales channels, makes us a valuable partner for businesses looking to scale, enter new markets, and enhance customer satisfaction. We're here to help your business scale, not just handle your logistics.

Updated Feb 2026

Get in touch with our team today to learn more about Whistl’s third-party logistics solutions.