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Third Party Logistics Provider
TLMT 352 Briefly describe role Third Party Logistics Provider (3PL). What advantages 3 PLs bring? Are disadvantages a company outsourcing logistics functions a 3PL?
A third party logistics provider is an independent company that provides single or multiple logistics services to other companies or shippers. The third party logistics provider will offer warehousing, freight weight negotiation, forecasting, transportation management software, in-depth reporting, and freight bill auditing (Hertz & Alfredsson, 2003). Currently 3 PLs provide strategic coordination for their clients supply chain. This means that they not only offer transportation and warehousing services, but they also offer on-time delivery of goods to the clients customers, and packing at reduced costs. 3 PLs offer value added services to the supply chain, which give the client a competitive advantage over their rivals. By outsourcing their supply chain activities, a client is able to focus in their core business and not worry about the delivery and transportation of their goods. 3 PLs will offer their clients the best and cheapest prices for transportation of goods. They are able to negotiate for...
Warehousing services will enable a client to only ship the goods required and keep the rest in safe storage. Warehousing facilities could be offered in different locations, which would allow the client to deliver goods to the customers quickly. The client will have access to the transportation management system which allows the client to keep track of their goods at any given time.
Advantages of 3 PLs
Using a 3PL will allow a company to reduce their operational costs, and enable the client company to focus on its core competencies. A 3PL will offer its customers enhanced tracking of their goods, integrated transportation systems, and increased efficiency. Third party providers invest in innovative technology that will allow them to provide enhanced monitoring. Enhanced monitoring will ensure that climate sensitive goods are transported in the desired temperature. 3 PLs operate multiple fleets of ships and trucks, and they have multiple storage warehouses and shipping ports, which ensure that they can offer one solution to a company (Halldorsson & Skjott-Larsen, 2004). This is beneficial to the company, as it will…
References
Halldorsson, A., & Skjott-Larsen, T. (2004). Developing logistics competencies through third party logistics relationships. International Journal of Operations & Production Management, 24(2), 192-206.
Hertz, S., & Alfredsson, M. (2003). Strategic development of third party logistics providers. Industrial marketing management, 32(2), 139-149.
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