International trade has seen major change in recent years; in the past, logistics involved simply moving goods from one place to another. Today, the market demands comprehensive services and specific logistics processes, making Contract Logistics the ideal solution for companies wishing to monitor and manage their operations.
Contract Logistics is defined as the comprehensive process from production to distribution at the final point of sale. This means that Contract Logistics is not simply the process of moving goods, but a far more comprehensive course of action that merges traditional logistics with supply chain management processes.
That’s where a 4PL (Fourth Party Logistics) enters the picture, which is a system by which the main logistics operator (who thus far has been functioning as a 3PL provider) coordinates operations with a fourth stakeholder who is in charge of managing the supply chain, creating a value chain in which many different stakeholders play a role. Let’s look at it this way:
Contract Logistics is the best solution for managing the growing international flow of goods while expanding our concept of the logistics process. For instance, it would be impossible to absorb the demand for goods and transportation during high-traffic shopping seasons such as Black Friday in the United States or its equivalent in other countries.
The Contract Logistics Process
When this fourth party to the logistics process enters the scene, a new handling protocol is established for the goods; this is a value chain where service has a direct impact on the outcome of the operation. This protocol addresses various areas:
- Production Line
- Distribution Plan
- Inventory Management
- Final Distribution
Types of Contract Logistics Services
When we talk about comprehensive services, this implies synchronization across all parties to the Contract Logistics process. There are two different types of services involved:
At TLM we have identified the key services necessary for the supply chain to be executed from start to finish, using the necessary infrastructure throughout the process.
- Access to goods from the production line
- Specialized warehousing
- Delivery and shipping of goods
- Distribution to point of sale
- Reverse logistics (post-sale and returns)
These are services TLM offers to round out the value chain. This, however, does not mean they are less important than the main services.
- Consulting and Customs Clearance
- Insurance on Goods
- Quality Management
Why use Contract Logistics?
As we have discussed, Contract Logistics is a great solution for the high demand for goods on an international level. At TLM, we have expert staff who can offer this comprehensive solution through our various divisions and specialized services, thus creating a value chain that spans from the production line to distribution at the final point of sale.