| If you happen to have a business in Los Angeles for | | | | They take care of all the company's logistic activities |
| which you would need a warehouse or warehouse | | | | on the request of their client. They do not develop |
| related services, you must have come across a Los | | | | or change any activity or process. |
| Angeles contract warehouse which also claim to | | | | Customer developers take complete control of |
| provide Los Angeles 3PL. 3PL or third party logistic | | | | the company's logistic functions. They integrate |
| providers offer warehousing, cross docking, freight | | | | themselves into the company and might also change |
| forwarding, inventory management and | | | | the process if needed. |
| transportation services, or other service involved in | | | | Usage |
| the supply chain management functions. | | | | Third party logistic services or application are mainly |
| The services they provide can be customized or | | | | needed for firms which may be too big or have a |
| scaled according to the market conditions or | | | | wide complex network. Therefore, logistics does not |
| customers demand. The third party logistics allows | | | | need to be the main focus or competency of many |
| the company to remain competitive without owning | | | | firms. In addition, these services are not needed at |
| much assets and resources. This reduces a lot of | | | | the time of acquisition of another firm or at the |
| operational cost for the client company. | | | | launch of a new product. |
| As IT brought on a huge boom in globalization, the | | | | Advantages |
| concept of third party logistics evolved in the 1980's. | | | | Third party Logistics offer several advantages to a |
| You must have seen a lot of third party logistic | | | | firm in different ways. A firm can focus more on its |
| companies such freight forwarders and courier | | | | other main objectives rather than the logistics, hence |
| companies, and there are others which incorporate | | | | strengthening its core competencies. In addition, the |
| subcontracted logistics and transportation services. | | | | logistics provided by a third party may cost lesser as |
| Most of these companies such as DHL, UPL and TNT | | | | the resources are not needed to be bought or rent. |
| logistics emerged during this period. | | | | Plus, a logistic provider may offer more expert and |
| Types | | | | specialized logistic services to improve the company's |
| Third Party Logistics can be classified into four | | | | competitiveness. |
| categories: | | | | Disadvantages |
| The first is the standard third party logistics | | | | Despite their many advantages, third person logistics |
| provider. These are the logistic providers with the | | | | may not be able to do all the things a client might |
| most basic activities like warehousing, pick and pack | | | | expect from it. There are some limitations and some |
| and also distribution. | | | | risks as well. One of them is that the firm itself loses |
| Service developers are based on a strong IT | | | | all or most of the control of its logistics functions. |
| infrastructure. They also provide the clients with | | | | Another is that a difference of opinion between the |
| many value added services such as tracking, cross | | | | firm and the third party logistics provider may occur, |
| docking, specific packing or unique security system. | | | | thus hindering the overall logistic process and function. |
| Customer adapters are the logistic providers. | | | | |