What characterizes 'third-party logistics' (3PL)?

Third-party logistics (3PL) is characterized by its role in providing outsourced logistics services to businesses. This involves a company contracting another firm to manage various logistics functions, which can include transportation, warehousing, inventory management, and order fulfillment. By utilizing 3PL services, companies can access specialized expertise and resources without the need to develop logistics capabilities in-house. This enables businesses to focus on their core competencies while relying on the 3PL provider to manage logistics efficiently.

The other options do not accurately reflect the nature of 3PL. For example, in-house logistics management refers to systems organizations use to control their logistics internally, which does not involve third parties. While reducing distribution costs can be a benefit of using 3PL, it is not the defining characteristic of this model. Additionally, enhancing direct sales does not align with the primary functions of 3PL, which revolve around logistics and supply chain operations rather than sales processes. Thus, the defining feature of 3PL is indeed its provision of outsourced logistics services.