Definitions Third Party Logistics (3PL): Outsourcing all or much of a companies logistics operations to a specialized company Third Party

Logistics Provider: A firm which provides multiple logistics services for use by customers. Preferably, these servicesare integrated or bundled together by the provider. These firmsfacilitate the movement of parts and materials from suppliers to manufacturers and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging and freight forwarding.

Advantages of 3pl Liability minmised so risk reducation Cost benefits through volume shipping document Reducation of capital expenditure

Disadvantages of 3pl Loss of control Higher exit barriers Unexpected fees

Challenges infront of 3pl Infrastructure congestion Lack of trust and awareness

Standard 3PL provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity. Service developer: this type of 3PL provider will offer their customers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks. The customer adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the company's logistics activities. The 3PL provider improves the logistics dramatically, but do not develop a new service. The customer base for this type of 3PL provider is typically quite small. The customer developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This

occurs when the 3PL provider integrates itself with the customer and takes over their entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them.

Overlapping 3PL can also be 2PL at the same time in the following cases:

when a shipping line owns a freight forwarder, when an airline owns a general sales agent (GSA), when a freight forwarder owns trucks or a warehouse, when a courier company owns planes.

Characterstics of 3pl Performed outsourced logistics activites Process management/multiple activites More customized services Long term commintment (1-3 years) Levels of outsourcing

Transactional outsourcing Based on transcation with no long term contracts and no bonding between the 3pl and the outsourcing company Tactical outsourcing Outsourcing on long term basis with negotiated contracts and integrated it system to facililtate the free information flow Strategic outsourcing Based on long term relationship with successful outcomes 3pl companies become partner in supply chain management

Top 5 3pl using companies in world DHL logistics $39900 Germany Kuehne + Nagal $20220 switzerland

DB schenker logistics $12503 Germany Geodis $9700 france Ceva logistics $9523 Netharlands