About 3rd party logistics service provider

What is Third Party Logistics service provider?

Third party logistics service provider means outsourcing logistics activities including transportation and warehousing to outside firms. For example inbound freight, customs and freight consolidation, public warehousing, contract warehousing, order fulfilment, distribution and management of outbound freight to the customers. So, it can be said that unlike the warehousing which provide only storage space, third party logistics provider have wide range of services.

Advantage of third party service provider
-Increase net profit through reduce costs-as the company have to pay some expenses such as labour cost and maintenance cost, it can earn much profit.
-Reduce financial risk-As investment in logistics assets such warehouse need large amount of money which can lead to financial risk
-Flexibility

Disadvantage of third party service provider
-It is difficult to find reliable partner
-Damage to the goods-as the goods are stored with the other products, we cannot say the other product cannot damage our product.
-Different customer service level