Freight forwarders, contract logistics, carrier partners, and so on… With so many different types of third-parties, it can be a challenge to understand the ins and outs of outsourcing logistics.
But if you’re ready to outsource, it’s important to understand the services, capabilities, and roles of different logistics providers, so you can make the right decision on who to partner with.
So, let’s start at the beginning.
Contract logistics have evolved rapidly due to the rise of on-demand logistics, but they often get confused with 3PLs that offer a different set of capabilities. While these terms are used interchangeably by some, they can mean completely different things.
In this article, we discuss the differences between the two in detail, and what you need to know before you outsource logistics to a third-party.
What is contract logistics?
Contract logistic companies, which can be known as anything from consultants to freight forwarding providers, specialize in various points of the supply chain from the production line to delivery management.
Contract logistics don’t typically ship or manage inventory and fulfillment, but rather help with the management of domestic and international transportation. For example, they ensure that ecommerce inventory is delivered to where it needs be across the supply chain, and they act as the middleman between shipping companies and online retailers.
Delivery management
Contract logistics are ideal for overseeing the delivery management processes. However, 3PLs that operate multiple fulfillment center locations can help brands allocate product based on where there is more most demand.
Order fulfillment flexibility
Unlike contract logistics, the right 3PL has the systems and processes to provide more flexibility over the retail fulfillment process.
For instance, ShipBob makes it easy for merchants to maintain control with access to a user-friendly dashboard that makes it easy to manage SKUs, create product bundles, manage subscription orders, and oversee B2B ecommerce orders.
Real-time shipment tracking
These days, customers expect real-time shipment updates on every order placed online. They want to know exactly when their orders is being processed, prepared, shipped, and when it will be delivered.