3rd Paty Logistics

History of 3rd Party Logistics

The development of 3rd party logistics can be attributed to the deregulation of the transportation industry during the 1980s. Prior to deregulation, the transport sector was heavily regulated by government agencies which covered every phase of the carrier’s business. This included regulation of rates, service offering and acquisitions. The complexity in obtaining authority to operate ensured lower levels of competition, limitation into market entry and encouraged firms to internalize their transportation operation. Many freight companies broadened their services from conventional transportation services to material handling, inventory control, and order fulfillment due to high competition, industry fragmentation and growth of technology. Many traditional trucking companies starting integrating, warehousing, logistics and Less than Truck Load (LTL) services remaking themselves into 3PL firms. Therefore most of the 3PL firms started from transportation as the basics of their business.

Role of 3rd Party Logistics

Third party logistics is the outsourcing of all or part of a company’s logistics operation to a specialized company. A third party is a provider of multiple logistics services for customers operating in various industries locally as well as globally such as aerospace, automotive, consumer products, electronics and industrial manufacturing. Moreover, it is a company that usually offers “one – stop shopping” for logistics services with capabilities to integrate these services in contract to companies that special in a specific area of service.

Role of Transportation in Supply Chain Management

Without well developed transportation systems, logistics could not bring its advantages into full play. Besides, a good transport system in logistics activities could provide efficiency, reduce operation cost, and promote service quality. A well-operated logistics system could increase the competitiveness in supply chain...