3PL Relationships in Logistics Management

Due to the large quantity of freight and the long distance that it must travel to arrive to its destination exporters and importers alike have found logistic service providers essential to engage in international trade (Rodriguez, Comtois, Slack, 2013). While some Logistics service providers focus only on the area of transportation others specialize in freight consolidation, distribution management, and warehousing (Robinson, 2014). They have enough market knowledge, information and communication systems to offer supply chain solutions tailored to the specific needs of any company be it small or large (Rodriguez, Comtois, Slack,

Over time, new healthcare reform measures were causing fundamental changes in reimbursement for services to hospitals and IDNs. Consequently, healthcare providers had to establish financial stability. This opened the door for third-party logistics providers (3PLs) to establish a strong presence in the healthcare industry. 3PLs? offered solutions to mitigate transportation and supply chain expenses that streamlined the order-to-delivery process and reduced expenses.

Logistics is a vital component of supply chain management. Both involve the planning, carrying out and management of goods, services and information from the point of origin to the point of consumption. Logistics aligns the multifaceted pattern of traffic and transportation, shipping and receiving, import and export operations, warehousing, inventory management, purchasing, production planning and customer service. Organizations, like the one I work for, see logistics as a critical design of the supply chain. When organizations incorporate logistics as a key component of the business plan, they can use it to manage, coordinate and monitor resources needed to move products in a smooth, timely, cost effective and reliable manner.

The freight services provided by APL Logistics included chain visibility for not only Billabong, but their customers and suppliers as well. This is an example of a flexible tripartite enterprise collaboration, where each party can plan, manage and track shipments (Naim et.al 2006, p.306). Additionally, there exists the capability to alter the intermodal choices, to benefit the supply chain. Intermodal capabilities are facilitated by a full service 3PL provider for optimal results allowing greater access and

The need was to choose a current enterprise which will be affected by these global changes and what strategies are appointed to deal with these global logistics changes. We have chosen Maersk Company, to analyze how these changes are impacting the overall stratagem of a logistics based organization.

The third party logistic is use by the outside company to perform all or part of the firm’s material and distribution of the product. 3PL are the independent providers,they are providing a single or multiple logistics services to a purchasing company. Infact the 3PL does not hold the ownership of the product distribution and they are responsible to perform the activities of the logistics for the purchasing firms. They also have a long-term relationship and commitment between the two parties. A company may outsource its various logistics fuctions to one or more third party logistics alinged with the management strategy to receive benefits of increasing flexibility , reducing costs and for improving

A review of literature is emphasizing the 3pl (third party logistics) performance which is cost efficient tool for FMCG (fast moving consumer goods) companies. Companies outsource their logistics and warehouse activity to the third party logistics to reduce the cost, which is directly effect on company’s other core function like production, procurement, finance. It gives competitive advantage to the company. Outsource the logistics and warehousing also directly effect on asset reduction and staff retrenchment. Today the firms are establishing symbiotic relationship among them, that is (win win situation) they all are beneficiaries.

In recent years, Third Party Logistics (3PL) service providers play a very important role in a supply chain of an organization. A brief literature review is given in this section of the paper. Tate (1996) identified seven factors (compatibility, deep understanding of a partner's business needs, open communications, commitment, fairness, flexibility, and trust) that improved long- term relationship between 3PL and their customers. Logan (2000) used agency theory to help in bonding 3PL/customers relationships. It is postulated that, cost reduction and services improvement criteria are most expected by clients to avoid conflicts with their 3PL. Fawcett and Smith (1995) identified five criteria’s to evaluate the 3PL performance,

A Third-Party Logistics Provider (3PL or sometimes TPL) is a company that provides an outsourced (or "Third Party") logistics services for part, or all of their supply chain management functions.to its customers. Third-Party Logistics Providers (3PL) specialize in providing an integrated operation including warehousing, storage, and transportation and distribution services. The advantage of the 3PL service provider is that their service can be scaled and customised to their customers' needs based on market conditions, growth of the business, extended to other cities and countries. The services they offer go beyond logistics and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. When

In today’s world, competence is taking on new dimensions. The ability to compete is being determined by the degree of responsiveness to customers & key issues handling. How fast you deliver the goods/ products, what the price paid by customers & what value customer is getting throughout the service is considered in a schematic & ordered way. Markets are quick demanding & customization of each logistics activities is essential for each customer, & has become the essential factor in logistics management.

There are many challenges being faced by the logistics industry today as the companies strive for sustainability. This is because the providers of logistics services have, over a period of several years, found them being integrated into the production processes of their customers, while at the same time, governments and businesses have continued to carefully weigh the issue of logistics in their investment and business decisions. Some of the previous trends and the forces of the operations of logistics that drive the transformation of a Freight forwarding company will be examined. It will focus on theories, conceptual models and frameworks that explain logistic operations. The gaps in the logistics operations and the dangers of not addressing

It is known to us, “in each industry, the customer is god, is operator's food and clothing parents.” This tells us that customers are important to organizations. With the current intense competition in logistics nowadays, most companies can provide high quality goods, even are willing to cut down prices if reasonable. However, how can suppliers gain a competitive advantage when high quality is expected and price must be maintained at a level to generate a reasonable return? In our views, it is no doubt that how various supplier service activities are valued by customers, more specifically, that is, the ability of logistics

Third party logistics is a provider that gives companies the ability to outsource their logistics services. Logistics services that may include anything throughout an organization that involves management of the way resources are moved to areas where they are required or needed. Some would say the term, third party logistics, come from the military. In the business world, third party logistics con somewhat have a broader meaning. Meaning that it can be associated with service contracts that involve shipping or storing of items. Third party logistics provide services that may be a single service such as warehouse storage or transportation related, but it can also provide a system-wide bundle of services that have the capability of managing a company’s entire supply chain. Photo provided by Robinson (2013).

Blanchard (2006) defined third party logistics as, “A single entity that coordinates all the logistics requirements for a given company/agency.” Today’s world business environment has become so competitive that companies in order to be successful in the market must deal with different resources for satisfying their customer need. In the past decade or so the competitive global market has made a big influence in the growing for external business. Third party logistics providers are more and more employing external companies for inventory management, transportation, warehousing, and other value added activities for customer services. Third party logistics ultimate goal is to provide a competitive advantage to the organization for which they are serving. According to Cardinal Logistics (2012), “Third-Party Logistics is an effective way to reduce operational costs, and allow a company to focus on their core competencies.

According to various studies, Berglund et al. (1999) explain that third party logistics has several definitions that are an activities consisting of transportation and management, and warehousing on behalf of the shipper are carried out. Wilding and Juriado (2004) define that a company who solely operates for the provision of logistics-related single or multiple services on a contractual basis, is called Third Party Logistics Company. Especially, the true third party logistics companies provide a solution to the problem in the supply chain by incorporating multiple logistics services that are managed solely or together (Schary and Larsen, 1995). Coltman, Gattorna and Whiting (2010) suggest that third party logistics companies must create a large range of services to meet their distinct needs. A definition by Lieb et al. (1993) explain that 3PL providers can assist the whole processes of supply chain or just only selected activities depending on a company’s preference. It is also conclude the definition of outsourced logistics services that the employ of external firms to provide logistics services for the whole or selected logistics activities within the process that have traditionally been performed within an organization is the outsourced logistics. The roles performed by the 3PL providers can be making especially to customers' requirements (The Client Company) derived from market demands and conditions.