Third Party Logistics Providers are firms that ensure customers of outsource by providing services along with their advanced knowledge in logistics and management. Third party logistics providers or firms that deals with logistics and management makes it easy for businesses to focus on their main goals without having to worry about transportation of goods or end line of productivity as well as distribution. Like said, third party logistics providers will monitor and be in charge of warehouses, transportation of goods, and operation so that businesses will not have to worry about these factors. These firms would also have to consider market trends to meet customer's demands and needs; It also has to make plans and adaptations for specific businesses in order to strike for profit. Most importantly, these firms have to be closely aware of delivery service requirements for products and services. Most third party logistics providers add up other services dealing significantly with productivity, operation, transportation, and other services dealing with integrating parts of the supply chain which then makes it a lot easier and effortless for businesses to focus and to leave these factors to these firms That are advanced and ensured.
Like said above, third party logistics providers provide services dealing with transportation, operation, and mainly anything that involves logistic management. Third party logistics providers are well educated and are experienced with logistic management which ensures customers and businesses their safety and is something that will minimize stress and will enhance quality in other areas of business. Other services include:
4. Specific packaging
5. Security system
6. Advices and plans
7. Managerial tips and suggestions
Types of 3PL Providers
There are different categories of 3PL providers which have different jobs and responsibilities to enhance quality and to monitor as well as cover all areas of logistics management. There are freight forwarders, courier companies, as well as other companies that offer services dealing with transportation and deliveries. The four main categories and functions of third party logistics providers include:
1. A standard 3PL provider: these providers perform standard and basic tasks such as pick packing, warehousing, and distribution of products.
2. Service developer: these providers will offer customers advanced value-added services such as tracking and tracing, cross-docking, specific packing, and providing a unique security system.
3. The customer adapter: Those providers in this position will have to monitor and take charge of all logistic activities. Most of the time, these people are requested by the customers but they are not normally included in some cases.
4. The customer developer: This position is the highest amongst other positions with respect to its activities and processes. People in this position will have to emerge themselves and be fully responsible of almost all logistic services of a specific business. Also, they have to look deeply in small details and make sure everything will be done by the time it has to be done.
Non Asset-Based Logistics Providers
Nowadays, technology has now become the number one impact on businesses and way things are usually done. Logistics management is one of the main areas of business that has been greatly influenced by technology and the associated. Non asset-based logistics providers provide services that still deals with logistics management; However, they do not have to perform on-hands services such as employing trucks, owning physical freights, warehousing, or employing storage trailers. In short, non asset-based logistics providers provide verbal and visual concepts and services like financial planning, scheduling, transportation fee plan, and other services. Non asset-based logistics providers are experts that set up teams to meet up with customer needs and wants since they are well-experienced and know technological tools as well as their uses well. These providers would also learn to negotiate and present publicly to customers their abilities, name types of methods that can be used, and pinpoint benefits the customers would have when using their service. Although, many 3PL providers today offer transportation services like shipping and flyer service offerings. These transportation services are called "On-demand transportation" which has become a great impact to businesses and has offered numbers of solutions to supply chain needs. Modes of transportation include:
1. FTL, Full Truck Load
3. Next Flight Out
4. International Expedited
Possible Reasons of Choosing Third Party Logistic Providers
1. Businesses can focus primarily on other areas of business such as advertising, productivity, and finance
2. Transportation of goods and its distribution plans are expected to be elastic and changeable since it has to adapt to new trend and market changes therefore, third party logistics providers are needed to confirm decisions on distribution and to set up plans that businesses might not be Able to
3. Third party logistics providers can decrease and minimize the overall business expenses
4. Business owners and entrepreneurs will not have to waste their time worrying about distribution, instead, they focus on productivity and product introduction to the market
Pros and Cons of Third Party Logistics Providers
1. 3PLs monitors and provides security for customers and minimize risks that deal with transportation and the distribution processes; Some firms monitor places where goods are distributed to make sure all goods are safe and completely distributed with no errors
2. Third party logistics providers care much about their customers and project out their efforts through extra services that can enhance productivity and increase business management quality
3. These firms even monitor routes and ways of transportation as well as use technology to communicate within the system not to waste time and to make transportation faster
1. Financial risks and losses- a provider has to learn about a specific business beforehand in order to startup plans
2. Charging minimum prices and costs but add additional fees later- causes customer turnover
3. Some firms may not have insurances for products and transportation systems
These firms have a wide variety of methods to deal with different customers and businesses which then needs time to adapt and to determine as well as pinpoint markets. In summary, the firms provide a safer, faster, and a cheaper way of distribution compared to a business dealing with all areas alone.