The Main Functions and Advantages of Third Party Logistics

The Main Functions and Advantages of Third Party Logistics

2022-11-25 11:57:00

Generally, third party logistics is always looking for ways to improve all aspects of the supply chain, so it has the tools and technology needed to make adjustments. Using third party logistics services may continuously improve your logistics process.


Ⅰ. The main functions of third party logistics


1. Transportation


In terms of transportation, third party logistics can work with carriers to integrate cargo smaller than containers (LCL) or trucks (LTL), track freight payments and insurance documents, and cooperate with private fleets. Cooperation with third party logistics can also help reduce transportation costs while increasing efficiency and developing solutions for complex supply chain challenges. By connecting to all stages of supply chain operations, third party logistics providers can often provide real-time visibility as your inventory moves.


2. Global shipping


It can be complicated and stressful for companies. Third party logistics can control your global transportation logistics, such as customs, freight forwarding and integration, to reduce the time and money you allocate for these processes. As a representative of the customer’s business, third party logistics also strives to meet all trade compliance requirements, manage costs, and execute as planned.


3. Information technology


Third party logistics often uses information technology to manage e-commerce, customer relations, transportation, and warehouse operations. Tools such as electronic data interchange (EDI), application programming interfaces (API), and cloud-based systems are the most popular tools trusted by third party logistics. Regardless of the tool used, the goal is to increase the visibility of supply chain processes and transportation.


Ⅱ. The advantages of third party logistics


1. Acquire professional knowledge and knowledge


Supply chain logistics can be complex; fulfillment, warehousing, and transportation all face major challenges. In terms of supply chain logistics, third party logistics organizations are experts and can pass on their experience and contacts to customers in order to quickly simplify the process. In addition, third party logistics can gain insight into the problems that may arise during international transportation. These issues include documents, customs, tariffs and different shipping regulations.


2. Save time and money


Using third party logistics can potentially eliminate the need to invest in warehouse space, technology, transportation, and employees to perform logistics processes, allowing you to focus more on your core competitiveness. In addition, third party logistics can make organizations proactively aware of potentially costly and risky supply chain errors. By providing industry forecasts, third party logistics can also help optimize inventory levels and save inventory holding costs. When working with third party logistics, organizations can also save time by acquiring the expertise needed to effectively execute supply chain logistics.


3. Scale operation


When companies use third party logistics, they can expand space, labor, and transportation based on current inventory. In addition, third party logistics can usually ease the transition between seasonal cycles and industry fluctuations.

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