What Abilities Should Third-Party Logistics Suppliers Have?

Understanding third-party logistics suppliers

Third-party logistics suppliers refer to enterprises that comprehensively undertake the logistics business of other companies. With the goal of rationalizing logistics operation, they conduct logistics planning, provide information consultation, and manage companies with logistics functions. In other words, they are enterprises that undertake the responsibility of logistics overall planning.

What should be noted when choosing a third-party logistics supplier?

The consulting capability of the third-party logistics supplier

In the past, logistics outsourcing only included one link in the operation. Now, in addition to logistics operations, outsourcing parties are objectively required to propose suggestions from the perspective of professional logistics operation. The content of these proposals basically revolves around how to reduce logistics costs, but enterprises would like to see proposals that deeply address substantial issues. For example, proposals for reducing logistics outlets, reducing inventory, and concentrating on reducing distribution vehicles. From the perspective of the carrier, such proposals will actually reduce their sales revenue. However, logistics companies that can actively put forward such proposals are the cooperation partners that enterprises are really looking for.

In addition, third-party logistics suppliers should also provide the basis and data simulation analysis for the above proposals to their partners. Logistics enterprises do not possess these capabilities themselves. Therefore, they should gain relevant knowledge through education such as participating in training or invite professional consulting companies to participate.

The planning ability of the third-party logistics supplier

Planning ability is the process of making plans for executing proposals by consulting advisers or planning to control logistics costs within budget. Generally, enterprises of a certain scale have this kind of logistics planning ability.

The management ability of the third-party logistics supplier

For comprehensive distribution logistics business beyond the carrier's ability, it can be further subcontracted to other logistics companies. Subcontracting objects also include dispatched employees engaged in warehouse operations and business contracting enterprises. The ability to manage these objects using good management methods is management ability.

In addition to outsourcing the above business to external companies, enterprises that operate their own logistics also require on-site management ability. In other words, this ability is "on-site operation management ability." However, some enterprises surprisingly do not have this ability, such as consulting firms and sales companies. When an enterprise entrusts logistics business to a company without on-site operational management ability, it may result in claims for failure to ship, so enterprises must be cautious when choosing third-party logistics suppliers.