The Advantages of Using a Logistics ProfessionalPosted by Holst Dougherty on July 17th, 2021 Third-Party Logistics in supply chain management and logistics is the use of third-parties to outsource specific components of its logistics, warehousing and fulfillment operations. These third parties could be entities that are not directly related to the business or companies involved in the supply chain. They include third party suppliers, brokers, distributors, venders, and other suppliers that are contract makers. In most cases, these third parties will engage in a transactional arrangement with the original contracting company. This article will discuss the types of third party logistics and what they do. When it comes to third party logistics, many supply chain operations can improve their efficiencies through the use of these suppliers. The companies in the supply chain have a need for these third party logistics services in order to meet delivery times and to increase their profit margins. In addition to increasing profit margins, third party logistics also help the shipping services by streamlining the shipping processes. Some of the services that third party logistics provide to supply chain companies include direct shippers, freight forwarders, and international freight forwarders. The first type of third party logistics provider is the direct shipper. Under the direct shipper category, the shippers are the ones that ship directly from the manufacturer to the customer. The shippers may act as suppliers or may act as a bridge between manufacturers and consumers. The shippers may also act as brokers that pair the manufacturers with consumers in the form of a distribution network. The second type of third party logistics providers are the freight forwarders. The freight forwarder is in charge of finding a carrier that can efficiently transport the goods to the final destination. They do this by locating the best shipping services to match with the type of merchandise that is being shipped. Some freight forwarders also act as logistics providers. In this case, the third party logistics providers act as the middleman between the manufacturers and the shipping services by having the shipping services book and have the cargo ready for shipment. The third party logistics providers also help to find the best possible shippers in the market. The third type of third party logistics providers are the inventory agents. This type of service provider works with the manufacturers or with the distribution chains to locate the highest priority supplies. Once the highest priority supplies are found, the inventory agents then find ways to get these supplies to the shippers. This inventory service function helps to improve the efficiency of the supply chain by ensuring that inventory is always available at the most convenient locations. The advantages of outsourcing are clear. The costs of third party logistics providers are low. The time and effort of maintaining in-house staff is reduced. The operating costs of a warehousing and distribution company are less than one third of what is charged by a third party logistics provider. Since third party logisticians provide their services in house, it is easy to adjust business model for the warehousing and distribution companies easily. The advantages of using a third party logistics company are not only cost savings. The size of an outsourced logistician firm is greater than that of your own, and this means that the firm can provide greater services and a great way to streamline operations. For example, a warehousing and distribution company can provide on demand warehousing services which mean that a great number of pallets of goods can be stored at a single location without taking up too much space. This is also a great way to improve customer service as well as customer loyalty. In addition, third party logistics companies can provide fulfillment services by providing on call and warehouse staff for a great increase in on demand fulfillment capabilities. Logistics outsourcing is a great way to improve the efficiency of the supply chain. When your logistics experts are in-house, you must be concerned about all aspects of the business such as hiring employees, training them, maintaining their skill levels, monitoring their productivity, and so forth. Third party logistics professionals provide insight into how to streamline the whole operation, as well as what needs to be improved in order to reduce costs. A third party logistics expert will also have the knowledge necessary to implement new technologies that will help to reduce labor and overhead while increasing productivity and lowering costs. Using an expert logistics consultant can mean that your warehouse operations are streamlined, increasing your ability to meet your customers' orders and replenishing stocks at the most efficient rate.Like it? Share it! More by this author |