The Use of 3rd Party Logistics Firms and Outsourcing Supply Chain Strategies

Topics: Supply chain management, Logistics, Third-party logistics Pages: 4 (1139 words) Published: April 1, 2013
The use of 3rd party logistics firms and outsourcing supply chain strategies

For the last couple of decades the interest in logistics alliances and third party logistics (3PL) has been growing in academics and industries. The common viewpoint is to consider 3PL as outsourcing of logistics activities. The aim of this paper is to take a complementary perspective by looking at 3PL as an insourcing of resources. It means the shipper gets access to the providers’ resources. Matthias, the author of “Is there need for the 3PL model? Guess what,” (2009, p 110-111) says, “One area that the world's most successful companies attribute their success to is outsourcing their logistics and supply chain activities/operations to a third party logistics provider.” Faced with increasing competition in the global market, many companies focus more on the logistics outsourcing as a way to increase profitability and to be more competitive. 3PL companies offer services that can allow businesses to outsource part of their routine logistics and supply chain management functions. The growth of 3PL companies has been driven by the need for organizations to become leaner, reduce costs and focus on core competencies. The remainder of the paper will indicate the recent developments and the potential developments in the future of 3PL. Recent developments

Third party logistics (3PL) companies are a becoming an important part of today’s supply chain. These companies offer services that can allow businesses to outsource part of their supply chain management function. Many 3PL companies offer a wide range of services including: inbound freight, freight consolidation, warehousing, distribution, order fulfillment and outbound freight. The growth of 3PL companies has been driven by needing businesses to become leaner, reducing assets and allowing focus on core business processes. For example, if a company has always managed its own logistics, outsourcing with a 3PL for the first time...
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