7Pl companies are still limited in number, only a few show up in searches. There are however; 7Pl services being offered by some 3PL Companies.
Most people do not really grasp the concept of 7pl, what 7pl services entail or how it works. before we offer an examples, we would like to point out that 7PL services are not for everybody to use. That does not mean you can’t work with 7pl companies; they are also 3pl companies and can deliver the solutions needed.
How do 7pl companies work ?
We are offering an example of how a 7pl company can work for you. This is an actual company working with a 7Pl company.
A manufacturer of Hammocks from Germany wants to enter the US market and South America’s Markets as soon as possible in order not to lose the time advantage. The Manufacturer has no intention of establishing physical presence in the USA due to high cost. They off course, have complied with all legal requirements to operate a business in the USA.
The manufacturer locates one of the most reputable Logistics companies in Miami , 7Pl Logistics. an agreement is reached and the business activities start.
- 7Pl Logistics picks up several containers from Hamburg Germany and ships as ocean freight to Miami
- Cargo arrives, Miami port, clears customs and containers are brought to Miami warehouse of 7PL.
- Product is counted, verified and put away.
- Both 7Pllogistics and manufacturer use sap business 1 SOFTWARE as required by manufacturer. All warehouse receipts, orders, invoices, etc are handled by SAP business. Manufacturer set up 7PL logistics to have access to the system to use.
- Orders come in to ship hammocks from Germany (E-commerce) or local sales reps. 7pl generates pick tickets, send to warehouse, order is packed and shipped to end user. Packages could be shipped via courier, LTL trucking or International air freight to other countries. Tracking Number is updated in the system.
- Invoices are issues ant sent to customers.
- Customer sends payment to manufacturer to the address of 7Pl Logistics. Payment is posted in the system by 7pl staff. Checks are deposited to manufacturers account in the USA.
In addition to above, 7PL logistics provides office space for the sales staff of the manufacturer to help with their sales efforts. The above was a simplified version of the services provided.
To Summarize: The 3PL company in Miami has become an extension of the company in Germany almost like another location which leads to the understanding of the concept of 7PL Logistics, One Contract One Bill.
Services offered by 7PL Companies in this case.
2- Customs clearance
6-Accounting support services, billing and collections
9- Courier services
10- Packaging Services
The collection of above services above when offered by 3pl companies help identify them as 7pl companies.
In recent years many International companies have adopted above described business model in order to gain access to new markets quickly and efficiently reduce the overall start up cost.