Types, Benefits And Advantages Of Third Party Logistics Services Providers

Third-party logistics service providers function simply and quietly. You are a business and you take orders and the third-party logistics provider fulfills the order. The supply chain and distribution of products is taken on and is outsourced to a third-party logistics service provider and he takes care of all the aspects of the supply chain.

With the super-fast and exponential growth of ecommerce, the need and requirement of third party logistics services providers have taken a massive jump and their business has multiplied much fold. It is a fact that 86% of Fortune500 companies use third-party logistics service and also 96% of Fortune 100 companies use services like these.

There are 4 types of third-party logistics service providers:

• Warehousing

These service providers take care of storing, shipping and handling returns. These work for vendors like Amazon Prime and so on.

These things should be analyzed while going for a 3^rd party logistics supplier from this domain:

1. The provider must have a huge network of warehouses in many different locations and only then can it help you process and handle orders swiftly
2. The pricing for the service must be transparent and competitive and all extra charges must be discussed before going for the service
3. Also, shipping carrier rates should be discussed beforehand
4. Insurance should be discussed and negotiated beforehand
5. The Daily cut off time should be discussed beforehand
6. Delivery service levels should be discussed beforehand

• Transportation

This is another different type of third party logistics supplier. They specialize in transportation which is quick, fast and easy. This is a critical step as the shipping time should be minimum so that the package reaches the customer on or before time.
These things should be kept in mind before going for this type of service provider:

1. The Origin location: The origin location should be clear and you should decide on that before signing the contract. It is critical to discuss it as later on it can cause discrepancies.

2. The Destination Location: Also, the destination should be pre-decided so that both the parties can discuss it beforehand and there are no pricing and cost-related discrepancies.

3. Shipping methods: The shipping methods and costs should be pre-decided

4. Time frames: The time frames should be pre-decided and discussed beforehand.

5. Service levels
6. Pricing and Discounts

All the pricing and discounts should be discussed beforehand.

• Distribution

Also, there are distribution based logistics service providers which make distribution quick fast and easy

• Shipping and Receiving

These service providers take care of shipping and receiving and that is their forte.

These are the advantages of going with 3^rd party logistics service providers:

• PROFESSIONALISM

The most important benefit of working with third-party logistics providers is that you get professionalism and professional services. These service providers specialize in this domain and thus are experts in it and thus they do the job really well. All their systems are in place and they help you get your shipment delivered real quick, fast and easy.

Moreover, they are more efficient and their work is more effective and most importantly they always deliver on time.

• COST SAVING

The business and company will save a lot on cost as they can just simply outsource all the logistics part of their business to third-party service providers. This will help the company save on a lot of costs and wastage. This way the company can focus on their real business and stop worrying about logistics and supply chain.

• TIME-SAVING

Also, the business and company will save a lot of time and resources which would have otherwise have been wasted and they can focus on their main business. In business time is money and thus the company does not want to waste time on something they can outsource and thus it makes complete sense for the company to outsource their logistics and supply chain management to an expert who will do the job well.

• FOCUS ON CORE COMPETENCY

The best part is that by outsourcing supply chain and logistics to a third-party logistics service provider the company can focus on its core competency and achieve maximum efficiency and profits. Focus is everything and when the company and business can focus on their core competency and business they will achieve more and earn more and they will not have to worry about supply chain and logistics as that will be taken care of by a third-party logistics service provider.

• CUSTOMER SATISFACTION

Also as all the business and its processes will become streamlined and the business will earn more. Then the business can focus on quality and then can pass on some of the money to the customer as savings and thus the business will drive customer satisfaction and delight.

CONCLUSION

Thus as we can see that outsourcing logistics and supply chain management to a third-party company makes absolute sense in every possible way. All parties which include the business, customer, and logistics service provider stand to gain from this arrangement. Moreover, the business can then focus on their core competency and thus maximize profits and achieve absolute efficiency.

The customer will be happy and satisfied as he will get good quality products quick, fast and easy and the business will go all the way happy to the bank as its sales multiply and it can spread its network all over the world.

If the job is done by a professional then that makes all the difference and this is true in the case of logistics management as well. If a professional does the job he does it well as he has mastery over it. Thus by all parties focusing on their core competencies the entire business flourishes and all businesses and parties stand to win.

Thus for sure, all businesses should go for this kind of arrangement as it stands to benefit in all possible ways.