Third-party logistics, also known as 3PL, refers to companies outsourcing logistics and distribution to logistics solution providers called 3PL providers. A 3PL provider is a company to which shippers (customers who transport goods using 3PL services) outsource a part or all the SCM functions of their logistics services. A 3PL provider plays a significant part in handling customer logistics requirements and undertakes transportation, location tracking, and sometimes product consolidation activities. Thus, a 3PL provider typically specializes in transportation, warehousing, and integrated operation services that they customize according to their customers' needs. Often, 3PL providers go beyond logistics and provide value-added services such as inventory management, cross-docking, door-to-door delivery, and packaging of products. They also provide strategic and operational value to many shippers across the globe. 3PL improves the effectiveness of logistics by using new and innovative ways to manage SCM.