Third Party (3PL) Logistics in India

Introduction: What is logistics? The process of managing the resource flow is the raw material or finished product between the consumer and the end user, that is, the customer and the organization meeting the requirements. There are various definitions in the world of literature and business, but the most appropriate definition is the overall relationship of supply, material management, distribution (Rushton A.). This logistics includes physical and information flows as well as the use of end products from raw materials to the final distribution at the storage location.

Today, many companies use third-party logistics providers (or third-party logistics providers) to outsource logistics services such as shipping, warehousing, crossdocking, inventory management, packaging, shipping and so on. 3PL relationship is a form of business process outsourcing focusing on the strategic operation of the customer supply chain. Many companies outsource functions other than core, such as accounting, IT, and human resources. Companies can contract with numerous 3PL contracts to manage specific traffic segments or customer segments. Alternatively, you can outsource the entire supply chain. 3PL makes daily operational decisions that enable employees in the company to focus on what they do best. In many cases, these services are summarized to provide a single point of contact to all or part of the company's supply chain.

3PL (Third Party Logistics) provider provides outsourced logistics services, including those related to the management of one or more aspects of procurement and fulfillment activities. In business, 3PL has a broad meaning and it applies to all service contracts including storage or transportation of goods. The 3PL service can be a single provider such as transportation and warehousing, or it can be a bundle of system-wide services that can handle supply chain management. An example of the mechanism of 3 PL contract is shown below. Book publishers hire authors, editors, and graphic designers to create publications, but sometimes you do not want to handle consumer ordering processes or shipping books shipping. Instead, the book publisher will process the online order using the fulfillment center, hire the trucking company, and ship the item. Both the shipping center and the carrier will act as a third party logistics provider. A single 3PL provider can process and send book orders.

The most important difference between a third-party logistics provider and a third-party logistics provider is that the third-party logistics provider is always integrated into the customer's system. Compared with 3PL 2PL is not integrated, he is simply a logistics provider outsourced without system integration. 2PL usually functions with a phone (express parcel service, etc.), and 3PL is informed almost every time about near future workload. Another difference is that 2 and 3 PL are service specification and customization. 2PL usually provides only standardized services, but 3PL is usually customized, especially offering services tailored to customer needs. This is probably due to a long-term contract common in third-party logistics markets. The cost effectiveness of third party logistics providers can only achieve stable contracts and profits over the long term.