Embedded 3PL: What It Is and Why You Should Be Using One

Embedded 3PL is a third-party logistics company that embeds its services into your supply chain. They are like Software as a Service (SaaS). In this case, you don’t need to maintain the system or pay for implementation. However, in an embedded 3PL, the service provider becomes your supply chain partner. They handle all shipping by providing and coordinating transportation of your goods. 

Embedded 3PL

What Is an Embedded 3PL?

An embedded third-party logistics service is a strategic alliance. This is because a third-party logistics company offers customized solutions. You can use an embedded 3PL to manage a company’s supply chain activities. Besides, you can also use it to improve efficiency. This is only possible if you have limited resources in your operations department.

A company using an embedded 3PL will often use other benefits from their chosen provider. The benefits may include transportation management or inventory management software.

An embedded 3PL is a company that has its warehouse and a fleet of trucks. They route their shipments. This means they handle the entire shipment process. They are different than an outsourced 3PL in that they do not outsource any of the logistics. Instead, they do everything themselves.

An embedded 3PL might be employed by a manufacturer who needs to manage the material flow. This involves moving goods from raw materials to production and distribution. Or it might be used by a retailer who needs to process customer orders before shipping them out.

The term “embedded” refers to one firm performing all three supply chain stages. They include procurement, transportation, and warehousing/distribution.

An Embedded 3PL Relationship Is Making Its Way Into the Logistics Industry.

The supply chain industry is becoming more complicated. More and more companies are looking to outsource their supply chain management. 

An embedded 3PL relationship has several vital features. The features differentiate it from traditional relationships between a client and a 3PL. 

First, the client retains control over its supply chain strategy in an embedded model. But the customer relies on a third party to execute those strategies.

Second, because the client retains control, it includes responsibility for overseeing execution. 

Third, clients use many suppliers for different parts of their supply chain operations. This means they don’t need to coordinate their activities. Instead, they can rely on their embedded 3PL partner to do so on their behalf.

How Does an Embedded 3PL Work?

An embedded third-party logistics provider (3PL) provides services like warehousing and distribution. It also works directly with the client. The 3PL performs the same tasks as a traditional 3PL. But, they’re all done in-house at the client’s facility or on their behalf by another company.

In this arrangement, there are two distinct types of embedded 3PLs. First, those that handle shipping and receiving for their clients. The second one is those that provide storage and distribution.

The former type of embedded 3PL is called “in-house” or “onsite” logistics providers. They manage all aspects of the supply chain from beginning to end. This includes sales orders and tracking without buying trucks or hiring drivers.

These providers can provide value-added services like order management systems (OMS). Other benefits may include warehouse and transportation management systems, etc. These services help clients improve their operations further.

The latter type of embedded 3PL is typically called a value-added service provider. The reason is that they don’t own any vehicles or warehouses. Here are a few things to note:

  • An embedded 3PL is a contractor that is part of your supply chain. They are not an external service provider, vendor, or distributor.
  • They are part of your team and work with you to create a lean, efficient supply chain. The supply chain increases profitability and productivity. It achieves this by eliminating waste in the process from end to end.
  • Embedded 3PLs help companies establish best practices for their operations. The services include inventory management, logistics processes, and transportation management. Others include warehousing operations, materials handling, equipment maintenance, packaging design/production & printing services.

Quick read: Warehouse Automation Trends 3PLs Should Be Aware Of.

Benefits of Using an Embedded 3PL Provider

An embedded 3PL provider offers storage and shipping services. These services are often provided as a value-added service to your customers. In some cases, your product’s manufacturer may require you to use an embedded 3PL provider.

Here are the significant benefits of using an embedded 3PL provider:

1. Cost savings. Using an embedded 3PL provider can help you save money on shipping charges. This is because they offer discounts that can be passed on to customers. In addition, you’ll also benefit from lower overhead costs. You don’t need additional staff members to perform these tasks. 

2. Customer service. An embedded 3PL provider will provide 24/7 customer support. This is if there’s ever a problem with their services. This ensures that clients get the best ordering experience possible.

3. Customization options. Specify the shipping options that should be offered alongside each product. This gives customers more choices when purchasing items from your store.

4. Control over the quality of logistics services provided by third-party providers. This is important if you’re using TAPP providers who aren’t as familiar with your industry.

Immediate Benefits to Your Business Operations and Bottom Line

As an eCommerce business owner, you’re used to working hard and sweating the small stuff. You might not have time to focus on some of the little things that can make a big difference in your business. Those little things are called third-party logistics providers when it comes to shipping.

A 3PL is a company that specializes in shipping products for other companies. When you partner with a 3PL, they take care of all aspects of fulfillment. This includes packing and labeling orders to ensure they get there on time. This also provides the orders cost less. That means you no longer have to pay retail prices for packaging materials. It also implies saving on rent costs. 

Embedded 3PL


In short, an embedded 3PL provider can be beneficial for many growing businesses. They allow you to focus on what’s most important—developing and running your business. At the same time, you get the assurance that experts take care of your shipping and fulfillment. The main advantage of using an embedded 3PL is controlling your end-to-end supply chain. This means you don’t have to rely on third parties for any part of this process. This gives you a better picture of what’s going on with your orders. For more details, contact sales support.

Recent Content