3PL (Third-Party Logistics) in EDI

3PL (Third-Party Logistics) in EDI: 

3PL stands for Third-Party Logistics.

In EDI, a 3PL company manages logistics operations (warehouse, shipping, delivery) on behalf of another company and exchanges EDI documents with suppliers, retailers, and carriers.

A 3PL handles storage and shipping, while EDI allows them to exchange logistics data electronically.

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A 3PL typically manages:

• Warehousing

• Inventory management

• Order fulfillment

• Shipping & transportation

• Returns processing

Many large companies outsource logistics to providers such as DHL Supply Chain, FedEx Supply Chain, or UPS Supply Chain Solutions.

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Common EDI Documents Used with 3PL:

EDI Document and Purpose

• 940: Warehouse Shipping Order
• 945: Warehouse Shipping Advice
• 943: Warehouse Stock Transfer
• 944: Warehouse Stock Transfer Receipt
• 856: Advance Ship Notice
• 846: Inventory Inquiry / Advice

These documents help track inventory, shipments, and warehouse activities.

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Example Scenario:

Imagine a company selling medical devices:

1- Customer orders from retailer
2- Retailer sends order to supplier
3- Supplier sends EDI 940 to 3PL warehouse
4- 3PL picks and packs items
5- 3PL sends EDI 945 / 856 confirming shipment
6- Goods shipped to customer

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Benefits of using 3PL with EDI:

Benefits include:

• Faster order fulfillment

• Real-time inventory visibility

• Reduced manual work

• Better supply chain tracking