Contract logistics

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by Admin  20   Feb, 2019

Contract logistics

Business processes by the logistics industry has become somewhat of a need in India owing to advancement in businesses as well as in the economic growth of the country. Contract logistics refers to the outsourcing of business management to a third party who will look after the management and operations of the parent company on their behalf. Their major focus is on planning involved in supply chains, warehouses, trasportation, material handling, inventory handling, ditribution of goods etc. The industry of contract logistics in India is pegged to be at $1.3 billion. While some companies prefer to handle their own logistics, others find it more profitable to outsource the management part of their business to another party. This has, time and again, proved to bring an enhancement in efficiency as well as development of the parent company.

Initially, consumers had to reach out to the businesses for their needs but with the gain in momentum of end-to-end logistics solutions, the businesses have started approaching consumers at easy and accessible locations, making it easier for the consumers. However, delivery of goods Pan-India is always going to be a tricky business. New age e-commerce businesses have already taken over in the very competitive markets of the economy. They believe in acquiring and retaining customers and hence give little or no importance to profits. Observations have pointed out that customers tend to be loyal to businesses that provide better quality products, better priced products, and manner as well as on-time delivery services provided. Keeping these facts in mind, businesses outsource their logistics operations to an outsider- mainly a 3rd party operator since keeping up with the high costs of the logistics acts as a dead weight for them. Contract logistics is one of the very few important functions of a 3PL company. They work towards setting up warehouses, consolidation centres, distribution centres as well as inventory management services. A 3PL may completely dedicate their entire storage facility or their services to a specific client for his specific requirements.

We have witnessed an improvement in the formal nature of logistics sector in India where good quality warehousing and efficient service providers play a major role in keeping up with a steady growth. Organized players in contract logistics sector is steadily rising by 15-20% annually.

https://www.managementstudyguide.com/3pl-logistics.htm http://www.businessworld.in/article/Indian-Contract-Logistics-Industry-Pegged-At-1-3-Billion-Gautam-Dembla-Spear-FM/26-10-2017-129594/