Today, many companies have decided to outsource their logistics processes, in search of cost savings or simply with the aim of focusing on the hard core of their business. Benefiting from the specialization of Logistics / warehouse operators and taking advantage of their infrastructures are the reasons chosen to entrust some of the processes of their supply chain. But what exactly is a Logistics / warehouse operator? Its duties? What types of logistics / warehouse operator do we find in the market?
Logistics / Warehouse Operator
A logistics / warehouse operator is a company specialized in managing the set of logistics activities of another company. Its objective is to ensure that the goods produced or sold by the client who has contracted them are moved and / or stored, efficiently and throughout the entire supply chain.
Not all logistics operators have the same characteristics or offer the same services, as they will vary depending on the degree of development they can offer to their customers.
Do I have to Give up all Logistics Control?
When an alliance is created with another company and we are at the time of negotiating conditions, we may be struck by the doubt: is it necessary that the company that I contract have all the logistical control? Depending on your strategy, you may be interested in yes, but sometimes you may prefer that some actions be carried out from your own company.
What Types of Logistics Operators do we Find in the Market?
Basically four, known by their acronym in English: 1PL, 2PL, 3PL and 4PL. Thus, there are different degrees, we could say of “commitment”, depending on whether there are more or less outsourced actions:
- 1PL (First Party Logistics):These are companies dedicated solely to the transport of customer merchandise. In other words, the company moves its transport to the customer’s warehouse and from there it is transferred to the contracted place, without interfering with any other logistics activity. The advantages for the customer are that they do not have to manage their own transport fleet.
- 2PL (Second Party Logistics):In addition to transport, it is also responsible for the storage of products. These Logistics / warehouse operators, therefore, have their own transport fleet, as well as logistics warehouses for the storage of their customers’ merchandise.
- 3PL (Third Party Logistics):These types of operators offer an even more advanced service, since they assume all the functions of the 2PL and, in addition, they add all the management, both of the warehouse and of the transport operations themselves. In other words, they are in charge of efficiently managing almost all the client’s logistics activities, such as inventory control, reverse logistics, traceability, etc. These types of operators tend to be even more specialized in specific sectors.
- 4PL (Fourth Party Logistics): 4PL operators do not have their own physical resources, that is, they do not have transport fleets or warehouses, but they are in charge of optimizing the supply chain. That is, they offer consulting services, planning, integration of new technologies, management, localization, etc., all with the aim of generating a competitive advantage as part of their core business. They take care of the strategy, while the practical part is handled by a 3PL operator.
- 5PL (Fifth Party Logistics): Those who speak of 5PL operators do so thinking of those who combine the functions of the previous two and who, in addition, deal with the management of various supply chains, allowing them to take advantage of economies of scale and further reduce costs, relying on new technologies.
Functions of the Logistics Operator
Let’s see below some of the functions that a Logistics / warehouse operator can carry out:
- Regarding storage: Tasks such as handling, weighing, classification, dispatch.
- Regarding transport: Organization of delivery times, specialization of transport services, possibility of giving real-time access to the transport service.
- Help in management and consulting: From organizing more efficient routes, managing customs procedures, quality controls and quantity of stocks, expiration dates.
- They can also help you in terms of logistics consulting, such as looking for new strategic partners, searching for better logistics technology, etc.
- Collaboration regarding other services, such as packaging, packaging, labeling, collections, assembly, merchandising.
Support regarding information processing: Search for better systems to transmit information, use and management of documentation.