Online Business
November 22, 2021

Logistics Service Provider: Definition, Pros & Services They Offer

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Logistics is the process of planning, implementing and controlling the efficient, on-time and cost effective flow of goods from point A to point B. In a more general sense, logistics refers to anything that concerns the arrangement or movement of people or things from one place to another. Logistics service providers help businesses move their products across different parts of the world through a number of services they offer such as supply chain management, transportation & warehousing among others. This post will discuss all about what logistics service provider's do and how they can be beneficial for your business.


Logistics Service Provider Definition

Logistics Service Providers (LSPs), often known as 3PL (third-party logistics) providers, are outsourced businesses that shippers use to manage their warehousing, distribution, and freight transportation. As a result, LSPs have better tools, technology, knowledge, and services than freight brokers, even though they operate under the same type of FMCSA operating authority.


LSPs have a “big picture” strategy for more complex shipping solutions, leveraging top-tier transportation management software (TMS) and BI (business intelligence) to leverage their people, technology, processes, and industry knowledge.


Many shippers consider integrating a third-party logistics service provider because of cost savings, but they rapidly learn numerous advantages.


Outsourcing has several advantages, including:


- Top TMS Technology Solutions are at your fingertips.

- Back-office work is being reduced.

- Increased Efficiencies and Cost Savings

- Utilization of the LSP Carrier Network

- Increased customer satisfaction with service.

- Risk management has improved.

- Ability to Scale the Business Easily

- Develop a top logistics solution quickly to gain a competitive advantage.

- Knowledge Exerts and Access to Top Talent

- Improved Order-to-Cash Cycle and Return on Investment


3pl Primary Services

Many 3PL companies specialize in different aspects of the supply chain, and they offer a wide range of logistical services. Most logistics services fit under one of the following categories:

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Procurement: the process of ordering and receiving items from other parts of the supply chain.

Order fulfillment entails receiving customer orders, picking and packing them, and arranging for them to be completed and shipped.

Storage: Keeping items in warehouses and other comparable sites for a short period.

Transportation: Organizing the consolidation, deconsolidation, management, and transportation of goods.


Additional services provided by 3PLs include IT system integration, inventory management, data interchange, reporting, reverse logistics, and other services.

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Related post: 3pl Vs 4pl: A Complete Comparison

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Procurement And Receiving Services

Ordering and receiving items from upstream in the supply chain are the basis of procurement. A 3PL supplier may provide the following services as part of procurement and receiving service:

- On behalf of their customer, they manage inventories.

- Recognize when inventory levels are low and place orders with suppliers and manufacturers.

- Arrange for products to be delivered to the 3PL warehouse from the supplier or manufacturer.

- Receive items into the 3PL warehouse and store them until they are requested or needed somewhere else.


Order Fulfillment Services

Order management, fulfillment, and distribution are three of 3PL’s primary responsibilities. A 3PL provider may provide the following services as part of an order fulfillment service:


- Customers, members of the public, and others may make requests for items.

- When orders are received, manage inventory and subtract from stock levels.

- They pick up the desired item from their warehouse’s storage.

- Pack the specified object for it to be dispatched.

- Arrange for the item’s loading and distribution to its final destination.

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Order fulfillment, picking, and packing can occur at several points along the supply chain, including as part of eCommerce or drop shipping orders, for onward distribution to 3PL customers or other logistics providers, or as part of retail or other commercial services.


Warehousing Services

A 3PL provider’s principal responsibility is to supervise the secure storage of items until they are required elsewhere. A 3PL company may offer the following services as part of their storage services:


- Customers can be assigned to public warehousing based on priority, capacity, and demand.

- Preassigned and rented out contract warehousing to a particular customer for a specific period.

- Specialist storage for various materials, such as chemicals, food, or merchandise, must be preserved in specific conditions.

- Storage of precious, volatile, or otherwise sensitive products in a high-security environment

- Tracking and placing of goods throughout the warehouse for simple identification, storage, and retrieval

- Inventory control and auditing to ensure proper goods receipt, stock level management, and distribution.


3pl Distribution Services

Distribution is the final type of service provided by 3PL companies. This entails moving items from a provider’s storage facility to other supply chain portions or end customers. For example, a 3PL company may offer the following services as part of its distribution services:


- Drayage, cross-docking, intermodal transport, brokerage, drop deck, and lowboy transport, full container load (FCL), less than container load (LCL), less than truckload (LTL), and truckload are all examples of distribution methods (TL)

- Based on AI mapping and modeling, fleet optimization for the effective delivery of commodities is possible.

- GPS and Internet of Things (IoT) devices are used to track items.

- Goods consolidation and deconsolidation

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3pl’s Other Services

Additional services are frequently provided by 3PL companies in addition to those listed above.


Freight 

Freight shipping frequently crosses land borders, necessitating maritime transportation. Creating such a route is problematic because that mode of transportation is inherently dangerous. Overseas transport is efficiently done through freight delivery networks, handled through freight forwarders and brokers to assure safe transfers.


A freight forwarding company’s routes are already planned and in place. They have the capability of transferring commodities safely and quickly across international borders daily. In addition, they can maintain track of your things and assure their safety as they travel overseas by using licensed freight movers and well-designated containers. Thanks to these onboard storage management and route planning procedures, Freights reveal the ideal foreign mass transit option for any item.


Freight Brokers

As the name implies, a freight broker is an individual or an organization that assists you in connecting with an approved freight to transfer your goods overseas. Freight brokers are key middlemen who connect you with the correct transporter for your goods’ travel, even though they are usually not asset owners. Aside from that, dealing with a broker saves you a lot of time and effort, as paperwork is usually a significant headache in any business. By hiring, you save money on organization, paperwork, and other non-core tasks that would otherwise take an excessive amount of time.


Freight Forwarders

You contact freight forwarders to obtain the most excellent price out of a freight transportation problem and guarantee that the logistics are correctly considered. Once commissioned, a freight forwarder will manage discussions, documentation, tracking, consolidations, and other freight-related responsibilities. A freight forwarder saves your organization money and valuable time by handling all of the hard liftings.


Transportation

Once the supply chain critical points (in the form of warehouses) have been established, the only thing left is to convey the items. Depending on the route and kind of travel required, there are a variety of options for transportation. A van line, for example, might be used to convey items brought overland rapidly and effectively. And a freight forwarder may be required for a route that involves delivery internationally.


The difference between products traveling from point A to point B and goods arriving at point B as quickly as feasible while remaining as safe as possible is determined by the mode of transportation chosen and the route chosen. A third-party logistics service provider can select both forms of transportation and ways to ensure that your goods are delivered to their destination as quickly as possible. You can achieve financial and entrepreneurial gain through quality shipping methods with a high-quality warehousing system with well-placed storage areas. Make sure these areas are at transportation connection points on the fastest possible route, combined with the best mode of transport for the manufacturer to distributor or client goods transfer.


Reverse Logistics 

While ordinary logistics is critical, the return process, also known as reverse logistics, is a more financially significant organization. First, make the most of your journey by visiting exciting places, climbing great monuments, and getting lost in the beautiful environment. Then, retrace your steps and do it all over again, but this time in reverse. It’s a near-impossible task, but one that your third-party logistics services company offers to take care of for you.


Returning goods is a problem in every industry since it causes traction and slows down the shipping process. To prevent the issues that arise with returns, logistics service providers build reverse logistics plans. The income and outcome of goods are managed by sophisticated patterns, resulting in the slightest friction between the customer’s revenue and the retailer’s. It operates like clockwork after a precise rotating supply chain is set up. As they transit through the warehousing organization system, inbound and outbound items cross paths and end up at opposite destinations.



Finally, they arrive at their designated places safely, thanks to the expertise of a third-party logistics services provider. Look no farther than RedBird Logistics Services if you’re looking for a third-party logistics provider that consistently delivers value, and you’ll be only one click away from optimizing your company’s logistics process.


Consolidation And Deconsolidation 

A 3PL provider consolidates products from numerous shipments into a single cargo to be shipped together. Deconsolidation is the inverse of consolidation, dividing a shipment into separate shipments with various recipients and destinations.


Wrapping Up

Simpl provides businesses with the resources to manage shipments. If you’ve been struggling with managing your complete supply chain, or handling inventory management and warehousing services for your business, it may be time to make a change. It is important that you feel confident in who handles all of this for you so call us today at (737) 225-8846! We hope this article was helpful when considering 3PL providers on the market today.