What is contract logistics?

In today’s complex business world, effective supply chain management is becoming a key factor in the success of companies. One approach that can significantly impact the optimization of logistics processes is contract logistics. In this article, we will take a closer look at this concept and find out exactly what contract logistics is.

What is contract logistics?

Contract logistics is a supply chain management strategy in which a company entrusts all or part of its logistics operations to a third-party logistics provider. Under a contractual agreement, the contract logistics provider (also known as a 3PL provider – Third-Party Logistics) assumes responsibility for the planning, execution and control of logistics activities, including warehousing, transportation, inventory management and order processing.

How does contract logistics work?

The contract logistics process begins with the signing of a contract between the company and the 3PL provider. The contract defines the scope of services, terms of cooperation, goals and performance indicators, as well as the method of billing. Once the contract is signed, the 3PL provider becomes responsible for ensuring the effective and efficient operation of logistics processes.

The 3PL provider acts as an external logistics partner with expertise and experience in supply chain management. It is responsible for coordinating activities, using technology and tools, optimizing processes and monitoring logistics performance. This allows the company to focus on its core business while the 3PL provider handles the logistics service.

Advantages of contract logistics

Contract logistics offers many advantages for businesses. Here are some of the most important advantages:

  1. Focusing on core areas – Outsourcing logistics operations allows companies to focus on their core business and competencies. The 3PL provider handles logistics management, allowing for greater efficiency and focus on strategic business areas.
  2. Economies of scale and cost savings – Contract logistics providers often have extensive warehouse networks, their own fleet of vehicles and advanced IT systems. As a result, they can achieve economies of scale and provide savings for the company by leveraging their resources across multiple areas.
  3. Flexibility and scalability – Contract logistics enables companies to adapt their logistics infrastructure to changing needs and market seasonality. Flexibility allows 3PL providers to respond quickly to increased or decreased demand for logistics services.
  4. Specialized knowledge and experience – Contract logistics providers have specialized knowledge and experience in supply chain management. This enables them to introduce innovative solutions, apply industry best practices and provide high-quality logistics services.

Summary

Contract logistics is a supply chain management strategy that involves outsourcing logistics activities to a third-party logistics service provider. This form of outsourcing allows companies to focus on their core business, achieve cost savings and benefit from the expertise of the 3PL provider. Contract logistics offers flexibility, scalability and the ability to innovate, resulting in more efficient and better managed logistics processes. One such logistics provider is our company, LCL Logistic.

LCL Logistic has a Class A warehouse, which allows us to place goods on six levels, up to a height of 14 meters. In addition, the entire warehouse area has a constant temperature that does not fall below 15 degrees, so we are able to provide professional contract logistics services. Are you interested in this type of service? Contact us and our representative will prepare a suitable offer.