Supply chain management is one of the key areas in global business. For a business to run smoothly, all the logistics functions have to be run in a streamlined manner. The logistics function can be challenging of the business handles it; this has resulted to many companies delegating the logistic function to third parties. Delegating the logistic function to third parties ensures that a company or any other business is able to concentrate on the key business activities. Third Party Logistics (3PL) deal with the supply chain key functions; in many cases they manage these functions better that when a business manages them itself. Some of the activities that third party logistic engages in include transportation, warehousing, inventory control, packaging, inspection and goods on transit handling. In the transport sector, the business hires or gives a tender to another third party business which will deal with transporting the goods. The transport services are offered for all goods that need to be transported through land, air or water. There are also transport services for heavy haul load which requires special transport services. During the transportation the first party company can track the movement of the goods; all travel documents are handled by a third party logistics company. Other services that are provided during transport, include warehousing services especially when the goods are long distance goods and require port or even airport storage before clearance. There are also insurance services for all goods that are being transported.
This article addresses the emerging challenges that are faced by the existing and new businesses in this sector. Market competition is increasing and, therefore, the need to come up with new market strategies. Most companies are now expanding their markets from just operating within the US; globalization is a new market trend among Third Party Logistics companies as a move to cope with the dynamic market competition. Most of the Third Party Logistics companies operate only within one continent, and this can be challenging in coping with market competition. In order to venture in the global market, 3PL have to ensure that they address key issues which include technology, communication and also operations safety.
To ensure that there is smooth communication the business has to work directly with the customers especially during the transportation of goods. Unless customers receive quality services from 3PL companies, they are likely to engage directly in the services outsourced from other parties. Customers need more than just the usual services provided by 3PL companies; value addition is a key issue that needs to be addressed by any third party logistic business that wished to remain in the market. Some of the services include IT services such as freight tracking and integrating warehousing with IT, security through offering insurance services to the customer’s goods and also collaborating with other stakeholders involved in the business, creating a partnership with other business that offer 3PL serviced makes service delivery more effective.
Logistics in Third Party Management fuelled by Globalization of Trade
The first article discusses the need for third party logistic companies globalize their operations, this article focused on how the third party logistics market has been fuelled by globalization of trade. Market prediction shows that, by the year 2018, the US 3PL business is likely to reach a market net worth of US$1.35 trillion. This shows how the market has grown after business expansions with most businesses going global. Many markets especially those in India, China and Mexico, have indicated an increase in market activities to cope with a sluggish market growth. As much as other value addition services increase the business revenue growth, global economic growth also determines how a business grows.
Werner Enterprise is a top freight company that operates in the US, the company won “The Most Technologically Advanced Award “which was a major recognition of its integration of information technology in business operations. The trucks used in cargo transport are equipped with MCP200 Mobile information system; this system also provides the round the clock communications and monitoring of the good being communicated. The application has got in cab navigation which enhances after driving; the driver is able to get the directions that enable him/her to deliver the goods without delays caused by wrong route. There is also the in-cab scanning which enables drivers to scan and send any documents to the main office without leaving the truck. Drivers do not have to physically to visit the main office to deliver cargo documents; this program enhances faster communication which reduced delay on the cargo being transported.
Errors which occur during data entry are likely to reduce with the use of this application.MCP200 Mobile information system comes with a media manager that allows the sending of any media file either audio, video or print media to a single or a group of fleet drivers. Media manager application enables drivers to receive permits and also instructions in time; the performance of the drivers is highly improved. Wi-Fi services are also available in this application. The Wi-Fi connection allows the connection of more than 800 trucks; communication is, therefore, made easier and faster. Performance monitoring is also easy with the use of this application; it is possible to monitor the fuel consumption of the trucks and the behavior of the drivers. Use of information and technology has put Werner Enterprise among the top Third Party Logistics Company in the US.
Third party logistics market fuelled by the globalisation of trade. (n.d.). Third party logistics market fuelled by the globalisation of trade. Retrieved March 10, 2014, from http://www.companiesandmarkets.com/News/Logistics/Third-party-logistics-market-fuelled-by-the-globalisation-of-trade/NI5892
What Will Warner Fleet Services Do For You?. (n.d.). Warner Fleet Services. Retrieved March 10, 2014, from http://www.warnerfleetservices.com/