The Essentials About 3rd Party Logistics Providers

by | Apr 25, 2016 | Transportation and Logistics

Logistics is a term bantered about in many different industries. It became a buzzword in the 1970s and 1980s. It is now commonplace. It is a means of running a company with greater efficiency and profitability, leaving very little to chance. In fact, while some companies handle their own logistics, others do not. They outsource this aspect to 3rd party logistics providers. The rationale is obvious. Such companies focus on providing such services for your business letting you get on with your work without worrying about the logistics of it all.

What Is Logistics?

Logistics today concentrates on transportation needs, specifically planning a holistic approach to the diverse aspects of such a company or companies. It integrates into a single and active plan the main aspects of a transportation company including warehousing, pick-up and delivery. It particularly concentrates on the following:

 * Efficiency of the delivery system

 * Assimilation of the flow and transfer of information between all involved parties

 * Handling of the products

 * Packaging of the various items

 * Maintaining an accurate and up-to-date inventory

 * Executing security

 * Transportation of the freight as requisite and requested

A complete logistic system results from thorough analysis of existing and projected data.

What Is 3rd Party Logistics?

The term 3rd party logistics (3PL) refers to the same process. However, it indicates that the transportation company or firm does not do the work in-house. Instead, it sources it out. It becomes the role of 3rd party logistics providers to fulfill this role for the firm. These providers work together with various freight movers and shippers to ensure that the work of transporting goods from the pick up to the final destination goes smoothly.

To accomplish this, 3PL providers offer several services. Among them are:

 * Transportation management: This may include such trade specific software as Transportation Management System (TMS)

 * Warehousing: they look at and have companies that provide warehouse facilities across the transportation zones when required

 * Cross-docking

 * Inventory management: This involves employing various types of software to ensure everything is accurate and timely

 * Packaging

 * Freight forwarding

 * Negotiation for lower rates: This will help improve profitability

Third party logistics companies are usually company specific. They focus on ensuring a certain type of good or product delivery system. Alternatively, they may concentrate on a specific aspect such as warehousing. 3PL firms may prefer to only do partial service while others virtually take-over all aspects of the logistic systems of a transportation company.

3rd Party Logistics Providers

Today while several companies have their own logistic service within the firm, many do not. They prefer to leave this aspect of smoothly running a business to experts in the field. In hiring 3rd party logistic providers, they can provide the company with the improved means of delivery to survive in a very competitive business environment while focusing on what they do best – run the business of trucking freight across country and around the planet.

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