Being a part of the supply chain or a business owner comes with many responsibilities and obligations to different parties. These involve a lot of different activities like managing resources. These activities were traditionally considered internal processes. Also, the companies demand a comprehensive service and specific logistic process for their activities. You can use contract logistics to handle these processes for you. So let us see what contract logistics is and how it is going to help you manage your supply chain processes.
All the things you have to do as a company
As we mentioned earlier, you have a lot of processes to fulfill in the supply chain. Let us take a quick look into all the work your company has to do to get the goods to their destination.
First, you have to research and determine the product and its design. And deciding what materials to be used is important too. Once that is decided you must find a supplier for materials. You should decide who is going to receive the final product as well. In the meantime, you have to plan about what type of operation you are going to use: contract manufacturing or Outsourcing, or something else.
But these are not the only things you have to do. Designing warehouses to store the goods, and finding distribution stations that would be effective when distributing products, and last but not least, finding retailers that will get your product to the customers in the most profitable way are just the gist of the workload you have to do in each step of the supply chain. Not to mention finding routes and transportation methods to transport the products into the warehouses and the distribution stations.
What if I tell you, that you can get all these done super easily? You just have to know about contract logistics.
What is Contract Logistics and what does it do for you?
It is obvious that all these processes we mentioned earlier take too much effort. Contract Logistics get the workload out of your hand. Contract Logistics is the comprehensive process that starts from production and goes to the final distribution and sales. It is not just a way of moving goods.
It hires other companies to do all these works involved in resource management. The importance of Contact Logistics is that it eases your work and gets it done the easiest and best way possible.
You might have heard about Contact Logistics as Third Party Logistics or 3PL as well. But now the Fourth Party Logistics has taken the spotlight. It handles the movements of your product right to the end until it reaches the end consumers. There is a fourth stakeholder in the Fourth Party Logistics. That Stakeholder is responsible for managing the supply chain and creating a value chain. In this chain, there can be several different other stakeholders as well.
Contract Logistics is the best way to manage the international flow of goods.
Let us get a closer look at the processes of the Contract Logistics
With the emergence of Fourth Party Logistics, there is a new protocol for handling goods. In this value chain, every action has an impact on the outcome of the product. Because of that, it is really important that these actions are completed with great care. The new protocol addresses many areas of the supply chain such as
This includes the processes involving materials and the production of the product.
In this part, the products are stored in one place and ready to be distributed.
This involves how to distribute the product from warehouses to the retailer. Here, it is necessary to consider the transportation methods and routes.
Tracking how the resources are spent.
How the product comes onto the end consumer through the retailer.
As you can see, it covers the supply chain right from the beginning to the very end.
What are the types of Contract Logistics services?
Depending on what type of service they are going to provide, Contract Logistics has two major types. They are
- Main Services
- Value-Added Services.
What are the main Services?
Contract Logistics use different infrastructures to execute the processes we mentioned earlier.
Specialized warehousing or Contract Warehousing
This is for you to have a partner warehouse to store and ship goods according to the contact.
Delivery and Shipping Goods (Transportation and Freight Forwarding Services)
This involves both receiving raw materials and shipping off finished goods. Also, it is not just for warehouses, it can be for manufacturers, distributors, or end-users.
Reverse logistics (Post-sale and Returns)
This service is for reclaiming products from end-users. This happens due to quality control issues, end customers’ satisfactory issues, or when the product becomes obsolete.
This involves storing and stocking goods that are in different levels of production. This includes raw materials, work-in-progress goods, and final products. These goods will be managed so they will not cost you additional money.
Manages the customer orders by picking and packing correct orders and delivering them to a shipping company.
Building new facilities for the clients. It involves conceptualizing, engineering, and constructing warehouses and distribution centers.
- Distribution to point of sale
- Access to goods from the production line
What are the Value Added Services?
There are three services under VAS(Value Added Services). They are used to fulfill the processes in the value chain. Following are the Value Added Services of Contract Logistics.
- Consulting and Customs Clearance
- Insurance on Goods
- Quality Management
Managing your documents
However, this physical work is not the only service Contract Logistics provides. It also includes managing paperwork like contracts with different parties like raw material suppliers, manufacturers, contract warehouse companies, distribution centers, and retailers.
The quality of your product depends on how you handle your documents. Here is a list of documentation handling services contract logistics provides you.
- Contract Terms
- Liability damage responsibilities
- Consequential damage responsibilities
- Warehouse lien procedures
- Contract termination obligations
What are the products and services that can use Contract Logistics?
Any company with a complex supply chain can require the service of Contract Logistics. As an example, pharmaceutical companies use Contract Logistics. Some medicinal products require special transportation and storage facilities like temperature-controlled storage. Contract Logistics can provide you with these required services.
When your company supplies products internationally, Contract Logistics come in handy. Contract Logistics can handle all the import/export customs duties and the complex government regulations.
Also, if you are thinking about expanding your business, you can use contract logistics. In such operations, you need new versatile warehouses and options for order processing and transportation options.
As for the products, if the Contract Logistics company is willing to handle your product, there is no limitation. But, many Contract Logistics companies do not like to handle livestock. And some companies do not prefer transporting hazardous waste. You can contact Contract Logistics companies and find out what kind of goods they are dealing with. That way you can decide which Contract Logistics company you can use for your products and materials.
What are the benefits of using a Contract Logistics Company for your supply chain processes?
Using contract logistics for your company’s processes gives you many advantages. This usually depends on what kind of services you receive from your Contract logistics company.
Contract logistics is quick and cost-effective. Contract logistics customize the services they offer, to fit into your requirements.
Improve your supply chain
Contract Logistics companies can help you make your supply chain more effective. There can be gaps in your supply chain that make your processes late and costly. Contract Logistics to find out where the problem lies and provide you with tailor-made measures to solve those problems.
Many of the processes that require labor can cost your company more than you expect. This usually happens at warehouses and when handling operations. Contract Logistics companies help you reduce those costs. Also, they can reduce your transportation costs. Contract Logistics companies usually partner up with shipping and freight
companies. They develop strategies to transport your goods without high costs.
So if you are looking to cut costs or expand your business, Contract Logistics is the way to go. They can take the stress of your head and workload off your hand. No matter how big or small your company is, you can acquire their services. With contract logistics, you can be a happy and successful businessman in no time.