Advantages of third-party logistics companies

Advantages of third-party logistics companies

Advantages of third-party logistics companies

1. Have professional level and corresponding logistics network

Through the development of specialization, third-party logistics companies have developed information networks and accumulated expertise in different logistics markets, including transportation, warehousing and other value-added services.

Much critical information, such as available truckloads, international customs clearance documents, air freight quotes and other information are typically collected and processed by third-party logistics companies.

For third-party logistics companies, obtaining this information is convenient and economical because the costs can be spread over many customers. For companies that are not specialized in logistics, the cost of obtaining this information and expertise will be very expensive.

2. Have economies of scale

Due to its strong purchasing power and cargo stowage capacity, a third-party logistics company can obtain cheaper transportation quotes from transportation companies or other logistics service providers than its customers. It can purchase transportation services in large quantities from transportation companies, and then Centrally load the goods of many customers, greatly reducing unit transportation costs.

3. Helps reduce capital investment

Through logistics outsourcing, manufacturing companies can reduce the investment required in transportation equipment, warehouse investment and other logistics processes, thereby improving the company's profitability and investing more funds in the company's core business. Many third-party logistics companies have good transportation and distribution networks at home and abroad. Companies that wish to expand into international markets or other regional markets for development can use these networks to enter new markets.

4. Optimal allocation of resources

Third-party logistics companies can also enable companies to optimize resource allocation, focus limited manpower and finance on core businesses, conduct key research, develop core technologies, and strive to develop new products to participate in world competition; they can save costs for companies and reduce capital backlogs. Reduce inventory and enhance corporate image.

Third-party logistics providers and customers are not competitors, but strategic partners. They consider customers and make their supply chain management completely transparent through the global information network. Customers can understand the supply chain situation at any time through Internet. Third-party logistics providers are logistics experts who utilize complete facilities and highly trained staff to achieve complete control over the entire supply chain and reduce logistics complexity.

Through their global shipping network and service providers (subcontractors), they have greatly shortened delivery times, helped customers improve services, and established brand images. Third-party logistics providers develop customer-oriented, low-cost and efficient logistics solutions through "tailor-made" design, creating favorable conditions for enterprises to win in the competition.

5. Third-party logistics companies have information technology

Many third-party logistics companies have formed alliances with independent software vendors or developed in-house information systems, which allows them to maximize the use of transportation and distribution networks, effectively track goods, conduct electronic transactions, and generate information to improve supply chain management efficiency. Necessary reports and other related value-added services.

Because many third-party logistics companies have invested heavily in information technology, they can help their customers figure out which technology is most useful, how to implement it, and how to keep up with the ever-changing development of logistics management technology. Cooperating with a suitable third-party logistics company can enable enterprises to fully enjoy better information technology with the lowest investment. (Source: SmartWMS intelligent warehouse management system)

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