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Third Party Logistics | XL Logistics Blog

Third Party Logistics Benefits

Posted on 30. Sep, 2013 by in 3pl

The Third Party logistics business model, owes its roots to the Motor Carrier Act from way back in 1980, which had the effect of deregulating the trucking industry and pretty much overnight, opened it up to other companies looking to get themselves into significant freight management systems. These service providers can accommodate all manner of commodities, throughout a massive geographical range, using numerous modes of transportation.

The operational schedule of a successful company of this type, will see it take responsibility for a large slice of the transporting requirements of a client organization. This includes parts of their chain of supply, where they will manage all matters pertaining to ordering, warehousing andĀ  distribution.

No two contracts are likely to be the same, meaning that a definitive description of the role of a Third Party Logistics provider, is difficult to standardize. What they do manage to achieve, in whatever function is agreed, is to smoothly assist a client, with expert coordination, in some of the most difficult areas of business, which in challenging financial times, can be of huge significance.

The massive advances in Information Technology has also played a very big part in the logisticalĀ  development processes of this kind. Step back twenty years and the sophisticated manner of handling business matters via third party participation, would have seemed a distant dream, but modern software applications have opened up opportunities globally, with heavy growth that continues on an upward spiral.

The biggest advantages that they are able to offer, are their lower transporting costs, which come about through sheer weight of freight numbers. This in turn enables distribution networks to be created without having to risk substantial capital. Additionally, for those who see fluctuations throughout the year, with peaks and troughs in their enterprise, it permits more precise strategic planning for things such as warehouse space and staffing levels.

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