A Third Party Logistics company (3PL) is an integrated shipping operation involving both warehousing and fulfillment services. Although these two functions, warehousing and fulfillment, are often used interchangeably, they have very different roles in the shipping chain. Both these shipping practices involve e-commerce business, and both usually require a large space for storing goods and material that is being shipped.
In general, a warehouse exists to store and control large amounts of inventory for an extended period whereas warehouse fulfillment companies maintain a large inventory of goods but have the added purpose of filling customer orders that can be large business to business (B2B) or smaller business to consumer (B2C) shipments.
Each function has a unique role in the chain of shipping logistics, and the clarification of their roles helps to smooth out the overall shipping process and assist the business owner in choosing what is right for their situation.
What is a Warehouse?
When you walk into a warehouse, you will likely enter a large building that has many shelves and spaces for storing goods and materials. Moving among and around these shelves are forklifts placing goods or moving products around to relocate or load carriers that will move the goods to other distribution points. Warehouses are often used for seasonal items that need to be stored when they are not in demand, and therefore there is the necessity for large amounts of space and efficient storage procedures.
Operations within a warehouse are static in that there is basically one type of activity. The warehouse managers move boxes and crates from one area of the warehouse to another to rearrange goods to best use the space available. The other function is to move cargo out the door and onto carriers for distribution. Inventory is added, moved, and transferred out. A warehouse is not used as a fulfillment center because there is minimal contact with customers who use or retail the goods.
Many times wholesale businesses or other businesses that work with large quantities of items will employ the warehouse storage approach. Small businesses can find the practice of sharing or leasing warehouse space very cost-effective to meet their inventory storage and movement needs, so this option is available to all sizes of businesses. The warehouse step in the 3PL shipping logistics is a critical one since there has to be a method of storing large quantities of inventory at a reasonable cost. Warehousing provides this option in the shipping chain.
What is the Fulfilment Center?
The fulfillment center is also a large building with ample spaces for shelving and the movement of forklifts. However, the activity is not static in the sense a warehouse is, and other important services are being offered. The fulfillment center stores products for shorter periods and ships the products out at a much faster rate.
The fulfillment company is a 3PL provider in the logistics chain, and they work with e-commerce companies, retailers, and corporations to fill B2B and B2C orders on a timely basis. It is the responsibility of the fulfillment company to get the goods to the customer in response to an order, and unlike a warehouse, the goods do not stay in the fulfillment center for long periods. A general rule is that if the goods are in the fulfillment center for more than a month, it is too long a time, and there may be storage fees attached to the products if they are not moved out. Asiana USA International Shipping company has the knowledge and experience to advise you on how to use warehousing and fulfillment to your advantage.
The activity in a fulfillment center is constant and usually operational for 24 hours a day. What you see when you are in a fulfillment center are employees receiving and unloading packages, repacking, labeling, putting new crates together, and finally shipping these out the door. This type of organization requires up to date technology for handling all the different demands and a fluid operational procedure to ensure packages are moved efficiently. The fulfillment center is an on-demand operation that requires a great deal of coordination.
A big difference between a warehouse and a fulfillment center is that the shippers in the fulfillment center have much more contact with customers. The constant movement of goods requires continuous communication and the ability to respond to unexpected requests based on market movement within the industry.
A retail business is more likely to use a fulfillment center rather than a warehouse. Sometimes a retail company will use a warehouse for long-term storage and then ship the goods from the warehouse to the fulfillment center for distribution to various retail outlets.
In other cases, a fulfillment center can fill the function of a warehouse, but a warehouse will not usually do what a fulfillment center can do. Fulfillment centers are an excellent choice for small businesses that cannot store items or complete the processes of packing and shipping.
When looking at a warehouse and a fulfillment center from the outside, you can immediately see a difference in the number of carriers coming and going from the building. The warehouse will probably have larger and more regularly scheduled deliveries and shipments because of the static nature of just unloading, storing, and shipping.
The fulfillment center will have much more carrier traffic in frequency and size due to the necessity to provide the in-and-out flow of goods to their customers. The fulfillment company also offers different services that are related to outsourced warehousing and fulfillment options that are an advantage for both large and small businesses.
The difference between a warehouse and a fulfillment center is not a subtle one, like many other aspects of 3PL shipping logistics. The extent of time in the storage facility, the activity within the facility, and the connection and communication with customers is different in each of the two companies. At Asiana USA, we can offer your business both warehouse and fulfillment services, and we can design shipping logistics to meet your specific needs. Contact us today for a consultation and an estimate at Asianausa.com or call us at 855-500-1808.