Main Core Competencies of Third Party Logistics Providers

Main Core Competencies of Third Party Logistics Providers

Although 3PLs can deal with a vast array of services, their core competencies in which they add value to supply chain management dominantly concern the product and the transport.

  • Product. Involve sourcing strategies where the 3PL assists in finding suppliers offering the best value proposition in terms of cost, quality, and reliability. In a globalized economy, sourcing options are diverse and complex, with many manufacturers ill-aware of the range of available options. The location and the usage of warehousing facilities are also an essential component over which 3PL may influence the distribution strategies of a product, including value-added activities (labeling, packaging, returns, etc.).
  • Transport. A 3PL can actively influence the shipping of a good by establishing contracts with transport providers and organizing load units in accordance with distribution requirements (costs, lead time). A 3PL also advises on the routing conditions within supply chains, namely frequency and scheduling, and the sequence of ports and distribution centers used.