First Party Logistics Provider - What Do They Provide?

What is third party logistics? Simply put, third-party logistics is the use of third-parties to outsource specific components of a distribution, warehousing, or  fulfillment      service. This includes the transportation of goods from their point of origin to where they will be sold. In addition, it refers to the administration of financial transactions between the customer and the provider of the goods. Lastly, it refers to the integration of the systems between the supplier and the customer. This is the essence of third party logistics, which is the main reason why many companies are turning to third-party logistics to meet their business needs.

The primary goal of third-party logistics providers is to deliver the most cost-effective way of providing their transportation services to their customers. Most providers offer a wide range of on-time, ground-and-site delivery options. They also offer value-added services such as freight consolidation, freight routing, or special-occasion shipments. When considering a logistics provider, determine how they will integrate the aforementioned three components.

Complete control means that your company can fully oversee the transportation and warehousing operations of the company. If a provider doesn't hold all of the responsibilities for the transportation and warehousing of your products, you may want to consider a provider that will assume those responsibilities. Remember that logistics providers have their own warehouses and their own drivers. Therefore, they have inherent expertise when it comes to driving your products to their proper destinations.

Value-added services may include full driver training for all employees, full-body protective equipment, and hazard insurance for all drivers. Most third-party logistics providers offer truck tracking systems and electronic tracking to help ensure driver compliance with FMCSA regulations and federal health and safety requirements. Some companies even provide GPS tracking capabilities to ensure that goods are delivered where they're supposed to be at the specified time and place. The more value-added services that a provider offers, the more your company will save. Ask questions about their offerings before choosing a provider.

If you're looking for a freight forwarder, the best way to find one that offers value is to ask what in-house logistics they'll use. A provider that works with multiple logistics partners will have an advantage over a provider that works in-house only. In-house logistics providers typically don't take the time to understand the customer's perspective on how best to fulfill their customers' needs. Third-party logistics providers know that customer orientation is important, so they provide this information upfront.

Customer orientation begins long before the logistics services are delivered. You should always meet with your chosen service providers and discuss how they plan to educate and train your employees on FMCSA and other compliance requirements. Second-party logistics providers realize that the physical environment of your business is always changing. You need to make sure your employees are up to speed on all changes so your operations run smoothly. Your second-party logistics providers should be flexible enough to help you address these issues.

When you hire third-party logistics, you gain access to a network of talented people who are committed to delivering the very best services. This doesn't mean that every provider is the same. Each one is unique, as each one has its own set of business goals and objectives. Before you decide to outsource, you need to spend some time evaluating each company on its current business practices and model. You should also request proposals from each service provider to determine which offer the best strategic and tactical solutions.

Consider the level of experience each of your service providers can bring to the table. A large logistics firm may be better suited to help you transition your customer supply chains. Similarly, small transport assets cannot handle the intricacies of international shipping. In most cases, it is advisable to choose first party logistics providers that offer services that are directly connected to your operations. This ensures the quickest implementation of your new supply chain and ensures that the transition goes smoothly. After all, the goal is to improve your overall customer experience.