Third-Party Logistics & Brokerage Category Guide

What Is 3PL?

Third-party logistics providers manage some or all of a company's supply chain operations—warehousing, inventory management, order fulfillment, and transportation. For dairy processors and farms selling packaged products, 3PL can provide professional distribution capabilities without building internal infrastructure.

3PL Services

Warehousing

• Temperature-controlled storage
• Inventory management systems
• Lot tracking and FIFO rotation
• Pick, pack, and ship operations

Transportation

• Carrier management and booking
• Route optimization
• Tracking and visibility
• Claims handling

Order Fulfillment

• E-commerce order processing
• Retail distribution
• Returns handling
• Custom packaging and labeling

When to Consider 3PL

Good Fit

• Growing beyond on-farm storage capacity
• Expanding into distant markets
• Need for professional cold storage
• High order volumes exceeding internal capacity
• Desire to focus on production vs. logistics

May Not Fit

• Low volumes that don't justify minimums
• Very local distribution only
• Products requiring special handling expertise
• When personal relationships with customers matter

Selecting a 3PL Partner

• Experience with dairy/perishable products
• Appropriate food safety certifications
• Geographic coverage matching your markets
• Technology capabilities (inventory, ordering)
• Pricing transparency and flexibility
• References from similar clients

Cost Considerations

3PL pricing varies widely based on services, volumes, and markets. Expect storage fees of $10-30 per pallet per month, picking fees of $2-5 per order, and various handling charges. Minimum volumes or monthly minimums are common. Compare total costs to in-house alternatives, including hidden costs like management time.