Contract logistics is an outsourcing of key resource management tasks normally performed by in-house logistics departments. Contract logistics firms manage tasks like designing, planning and managing supply chains, designing storage facilities, developing shipping applications, storing products, processing orders and gathering payments, as well as providing specific aspects of customer support. Although contract logistics has existed for decades, they are becoming increasingly popular due to the current global economic climate. The global supply chain market, in particular, is benefiting from these outsourcing activities.
In the contract logistics market, there are 3 different types of organizations that provide logistical services: Private label logistics providers, public order logistics providers and third-party logistics providers. Private label logistics providers are independent entities that contract with other businesses to provide specialized services. Public order logistics and third-party logistics providers are also independent, but work closely with major distribution centers and businesses. Private-label logistics providers are more specialized and often have a smaller and more customized set of services.
For those unfamiliar with the terminology and history of contract logistics, allow me to introduce you to “shipbob”. A shipbob is a person assigned to a specific task in a supply chain. For example, if you’re dealing with the transportation of a container of electronics, your “shipbob” will be the person who loads the container, places it on a vessel and then unloads it at its destination. While this may seem like a small detail, it represents a huge piece of the overall logistics process.
There are many benefits to outsourcing your warehousing needs. You can use contract logistics to address a variety of short-term and long-term problems associated with warehousing needs, such as excess inventories, excess stock, employee theft, or supplies that aren’t sold on time. A contract logistics provider takes care of the logistics planning, execution, and evaluation for your company. This means that third-party service providers can help you streamline your warehouse operations, increase your inventory levels, reduce your transportation costs, improve your inventory tracking and forecasting, and boost your profit margins. All these improvements result in more sales, higher profits, and a better bottom line.
Another benefit of using contract logistics for your business is that third party logistics companies include a comprehensive range of services, not just transportation. Some services that are offered by logistics firms include custom freight solutions, contract packaging, and transportation. Third-party service providers can help you achieve maximum efficiency by streamlining your supply chain. They can also help you save money and avoid waste. Other benefits of using third-party logistics providers include access to experienced and trained employees, streamlined planning and delivery, as well as customization. Here’s how third-party logistics help your business:
When choosing a contract logistics company, make sure they can meet all of your logistic needs. For example, some contract logistics companies offer on-board pickup, which allows customers to simply pick up their goods at any of their shipping points and drop off the same at their own shipping point. Other contract logistics companies offer truckload and pickup services at various locations, including Whole Foods, Safeway, and other grocery stores. If you don’t need any extra services, choose a company that offers just flat-rate shipping to your customers.
Management and logistic:
Some contract logistic companies have extensive experience in freight and delivery management and logistics. These companies can help you streamline your inventory tracking, manage your deliveries, increase your inventory levels, reduce your transportation costs, improve your customer satisfaction, and improve your cash flow. Using a contract logistic company to complete your supply chain gives you the ability to concentrate on your core business activities and expand your business with very little additional cost or effort.
Your contract logistics provider should include a customized solution that addresses your unique supply chain needs. You should choose a warehouse logistics provider that can help you consolidate and track your invoices, handle returns, provide you with an experienced and knowledgeable customer service team, provide you with real time inventory management, and integrate all of your customer data with your own internal system. If you want to use third party warehousing or Sorting services, your contract logistics provider should be able to provide you with the in-house equipment to perform these functions, or have access to equipment suppliers that can provide you with the equipment you need to perform these functions. You should also consider outsourcing non-core functions such as customs clearance, which will allow you to focus on more important functions like handling your customer’s goods.