Third-Party Logistics

1. PRASHANTH S
RA1852001020061

2. Third-Party Logistics Explained
 Third-party logistics mean that a third-party business is used to
outsource logistic services. These services can include all activities that
involve management and the various ways an enterprise moves
resources from one location to another.
 These logistic services can include operations, transportation,
warehousing, production, and much more. Third-party logistic
contractors are indispensable to many businesses, with 80 percent of
Fortune 500 companies using third-party logistics contractors.

3. There are four categories:
 Standard third-party logistics provider.
 Service developer.
 Customer adapter.
 Customer developer.

4. Standard third-party logistics provider.
These companies do a little of everything from
distribution and warehousing, to pick-up and
packing.

5. Service developer
These companies have a technology background and
provide value-added services including tracking, custom
security, or cross-docking. These services are based on
economies of scale, meaning the companies have cost
advantages with larger batches.

6. Customer adapter.
This logistics provider caters to smaller companies.
Essentially, complete control is taken of the client’s
logistics. Here, new services aren’t added, but the
net result is that typically service quality is greatly
improved.

7. Advantages
Businesses benefit greatly from cost and time savings with
third-party logistics providers. The logistics company has
better networks and know-how to keep the business
running efficiently with low overhead costs. With more
contacts to utilize, the small business also must invest less,
despite paying for the service of the logistics company.

8. Disadvantages
While there are few disadvantages, they do exist. You must
choose the right provider because the small business loses
all control of this end of the process. If you want a service
the provider doesn’t offer, you wait until your contract
expires to find someone else. You’re stuck if they provide
poor customer service. IT systems must also be in sync.

9. Conclusion
For small businesses who choose to use third-party logistics providers for
shipping, there are little details to consider that make the job easier for the
provider. Labeling is an excellent example of this. When providing labels,
ensure you use the most efficient printing method and purchase the right
type of label. It should be weather-proofed and large enough to read.
A third-party logistics provider will make the small business owner’s life
infinitely easier, and little details from the owner can make the relationship
with the provider simpler as well.