A third-party logistics (3PL) provider is a business you outsource your logistics to. They store your stock, pick and pack orders, and manage freight so your goods reach customers on time. You keep control of your products and customers, while the 3PL runs the warehouse, the trucks and the paperwork.

For Australian businesses, that matters more than it does in most countries. Long distances, a spread-out population and patchy regional delivery make logistics hard to do well in-house. Here’s what a 3PL does, when it makes sense to use one, and what to look for in a partner.

What does a 3PL provider actually do?

Most 3PL services fall into two groups: managing your stock, and moving it.

Warehousing and fulfilment

• Receiving and storing your inventory
• Pick, pack and dispatch for e-commerce and wholesale orders
• Stock control and reporting, so you always know what’s on hand
• Kitting, labelling, returns handling, bonded or temperature-controlled storage

At PACT, this is Housed by PACT.

Transport and freight

• Local, interstate and regional delivery
• Freight management across carriers
• Import and export coordination
• Break bulk, project cargo, container handling

At PACT, this is Delivered by PACT.

A 3PL is different from a freight forwarder, which mainly arranges shipping. It’s also different from a courier, which only delivers. A good 3PL connects storage, orders and freight in one place.

3PL vs 2PL vs 4PL

Why Australian businesses use a 3PL

Distance is expensive. Getting stock from one capital city to customers across the country, or out to regional towns, takes planning and carrier relationships most businesses don’t have.

Customers expect fast delivery. Online shoppers now expect quick dispatch and tracking, wherever they live.

Peaks are hard to staff. EOFY, Black Friday, Christmas and vintage season can double order volumes overnight. A 3PL absorbs those peaks without you hiring and training seasonal staff.

Compliance is getting tighter. Chain of Responsibility laws under the Heavy Vehicle National Law make everyone in the supply chain responsible for safe loading and transport. Exporters also face biosecurity and documentation requirements. An experienced 3PL already has these systems in place.

Warehouse space costs money. Leasing, fitting out and staffing your own warehouse ties up capital. With a 3PL you pay for the space and service you use.

Signs your business is ready for a 3PL

• You or your team are packing orders instead of growing the business
• You’ve run out of space at your premises
• Orders are slipping during busy periods
• Freight costs keep rising and you’re not sure why
• You want to sell interstate or export but don’t have the logistics set up

If two or more of these sound familiar, it’s worth a conversation.

What to look for in an Australian 3PL

• Location. Where the warehouse sits affects delivery times and freight costs to your customers.
• Systems that connect. Look for integration with your online store or ordering platform, plus live stock reporting.
• Service levels in writing. Ask for agreed targets on pick accuracy and dispatch times, and how they’re reported.
• Clear pricing. Get every charge itemised, including peak surcharges and any minimum monthly spend.
• Insurance and liability. Check who covers your stock if it’s lost or damaged in storage or transit.
• Industry experience. Wine, industrial cargo and ecommerce all need different handling.
• A real person to talk to. You want a partner who answers the phone, not a ticketing system.

The downsides, and how to avoid them

A 3PL isn’t right for every business. Go in with your eyes open.

• Less hands-on control. Someone else packs your orders. Agree packing rules and service levels up front, and check the reporting.
• Unexpected fees. Peak surcharges, special handling and minimum spends can erode savings. Ask for a full fee schedule before you sign.
• Relying on one provider. If their systems go down, so does your dispatch. Ask how they handle outages and peak periods.
• Volume. If you only send a handful of orders a week, doing it yourself may still be cheaper.

3PL FAQs