Third party logistics (3PL) involves outsourcing logistics operations like transportation, warehousing, and inventory management to specialized third party providers. 3PL is a large industry that employs over 1.7 million people and accounts for over 5% of the UK GDP. Companies outsource to 3PL providers to reduce costs, free up resources, and gain technical expertise and focus on their core business operations. The top 3PL providers globally are DHL, Kuehne & Nagel, and Schenker.

1. Third Party Logistics Anwar Mohamed 31 October 2008

2. Definitions Third Party Logistics (3PL): Outsourcing all or much of a companies logistics operations to a specialized company. Third Party Logistics Provider: A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated or “bundled” together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging and freight forwarding.

3. How to works… Customer 3PL Provider Your Enterprise

4. SIZE AND SCOPE Contributes well over 5% of the GDP National Statistics,2006 5 th Largest Industry in the UK Prospects,2006 Employs over 1.7 million people Skills for Logistics , 2006 Involves with over 65000 organisations Insidecareers,2006

5. WHY OUTSOURCE? Cost & Time effectiveness Freeing resources Technical expertise Asset Reduction Focus on corporate core competitiveness

6. % of 3PL Providers Used Source: Focus 06

7. Globalization 80% of the top 200 UK companies operate on a global scale SHANGHAI, CHINA PHILIPPINES U.K. HONG KONG KOREA JORDAN HONDURAS DOM. REPUBLIC LOS ANGELES, CAL. SAIPAN LEGEND MERCHANDISING & PRODUCTION SERVICES PRODUCTION SERVICES US - Hayward SRI LANKA DHAKA, BANGLADESH NEW YORK, NY F I J I TAIWAN MAURITIUS SWAZILAND ISRAEL EGYPT PORTUGAL SPAIN MINNEAPOLIS, MINN. HAYWARD CAL. GUADALAJARA, MEXICO GUATEMALA NICARAGUA LAHORE, PAKISTAN NEW DELHI, INDIA FRANCE CHITTAGONG, BANGLADESH MALAYSIA MADRAS, INDIA BANGALORE, INDIA BOMBAY, INDIA GUANGZHOU, CHINA DONGGUAN, CHINA QINGDAO, CHINA TIANJIN, CHINA MEXICO CITY, MEXICO THAILAND SINGAPORE POLAND INDONESIA DUBAI KENYA Madagascar MILAN, ITALY FLORENCE, ITALY TURKEY SHENZHEN, CHINA EL SALVADOR BRAZIL LESOTHO DURBAN VIETNAM BAHRAIN KARACHI, PAKISTAN

8. Top Ten 3PL’s Customers Global Costs $366.3 $678.3 Total Costs $37.4 $77.4 $67.2 $13.3 $27.8 $34.0 $84 $25.3 $98.2 $156.4 $98.6 $13.6 $32.2 $38.4 $179.7 $63 Automotive Technology Retailing Consumer Products Food and Grocery Healthcare Metal Industry Other Domestic Costs Industry Global

9. Clients of 3PL Providers

10. Services Provided By 3PL’s

11. Top 3PL Providers Est. Rev. (£M) £4,800 P&O Nedlloyd 5 £5,700 DHL 4 £6,400 Schenker 3 £6,900 Kuehne & Nagel 2 £8,300 Excel 1 Revenue Provider Rank (2003)

12. For a Successful 3PL Develop an Outsource Strategy Measure Performance Create a Project Plan / Road Map

13. Source 3PL definition: http://accuracybook.com/glossary.htm Top 10 3PL providers: http://www.inboundlogistics.com/3pl/awards.shtml Successful 3PL implementation: http://logistics.about.com/od/thirdparty/a/uc041805a.htm Sangam, VK. (2006). Implementing Third Party Logistics. Retrieved May 5th, 2006. From Massey University, About Business and Finance website: http://logistics.about.com/od/thirdparty/a/uc041805a.htm Red Prairie: http://www.redprairie.com/Industry%20Solutions/Third%20Party%20Logistics.aspx Class lecture slides: http://logistics.about.com/od/thirdparty/a/uc041805.htm CILT uk Logistics and Transport Focus Magazines