Services like material delivery to businesses, warehousing, and customer delivery are all examples of logistics services, which aid in the movement of goods throughout the supply chain. Because the field of logistic services is so vast, it is divided into several levels, including 3PL, 4PL, and 5PL. 3PL (third-party logistics) providers offer services like warehousing and transportation. 4PL (fourth-party logistics) providers are firms that coordinate and manage the entire supply chain for their clients. 5PL (fifth-party logistics) providers use technology to manage the supply chain and provide end-to-end solutions.
What are the Various Logistic Service Types?
The most popular 4PL services used by eCommerce businesses include:
1. Freight forwarding
The logistics of moving the freight from the point of origin to your fulfillment warehouse are involved when you place a purchase order with your manufacturer, a wholesale supplier, or a distributor. A shipment is led by a freight forwarder from the producer to the fulfillment facility. Transportation by truck, rail, or air is included in domestic freight forwarding. Rail or truck transportation is almost always used for full truckload (FTL) or less than truckload (LTL) shipments of large or heavy items.
Shipping urgent orders or expensive goods? Freight forwarders typically choose to use air freight in this case. International freight is often transported by container ship in FCL or LCL (less than container load) shipments, but air freight is used for lighter or more valuable goods. Utilizing a logistics services provider has the benefit of aggregating a large number of shipments, making it more incentive for the freight forwarders it collaborates with to offer better service.
2. Inventory control
Every successful eCommerce business is built on effective inventory planning and management. A pain in the neck can also come with inventory management. Automating as much of your inventory management as you can will help to ease the pain. An inventory management system with warehousing capabilities might be offered by a logistics services provider. Better inventory control reduces backorders and increases profitability overall.
3. Third-party logistics
These are logistics provided by a third party. Various logistics services are grouped under the umbrella term of third-party logistics. Receiving, warehousing, pick-and-pack order fulfillment and outbound shipping are the basic elements of eCommerce fulfillment that are offered by the majority of 3PL service providers.
Additional logistics services that a 3PL might offer include:
- FTL and LTL shipping
- Kitting and assembly
- Returns (reverse logistics)
Third-party logistics companies develop into important business partners for eCommerce businesses that outsource order fulfillment.
4. LTL freight shipping
Before the furniture container is loaded onto the ship in China, the freight forwarder makes sure the paperwork complies with regional border control requirements. Additionally, it guarantees that the container is covered by cargo insurance. If there are not many couches and chairs in the container, the freight forwarder might be able to save money by bundling the shipment with other compatible items. When the container ship arrives at a port in the U.S a few weeks later, the freight forwarder confirms the paperwork is in order once more so the furniture can pass customs.
Choosing to use a 4PL service for your freight forwarding needs has many benefits, one of which is that you only need to communicate with one person throughout the entire process. Your 4PL provider will also handle any problems that come up during transport, making things much easier for you.
5. Management and completion of the inventory
A good candidate for LTL shipping is a customer delivery that weighs more than 150 pounds, such as a furniture items delivery. The freight company is able to deliver the goods right to the client's house. The fulfilment company may use UPS and FedEx for furniture shipments weighing less than 150 pounds. Even better, the 4PL inventory management system assists you in maintaining inventory control and preventing stockouts. In order to help determine when to place a new order, the system analyzes order trends.
By utilizing a comprehensive array of logistics services, the furniture company frees up its staff to concentrate on more complex tasks that will help the company grow and improve its bottom line. The decision made by this online retailer to outsource some of its operations is excellent.
Conclusion
The control of product flow, effective planning, and effective management of storing goods and information are all made possible by the important role that logistics services play in supply chain management. A company should, therefore, work with a seasoned and reputable logistics company in order to improve efficiency and obtain a better customer experience.
