THIRD PARTY LOGISTICS(3PL)

THIRD PARTY LOGISTICS(3PL)

Third Party Logistics (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself.

Organizations that provide one or many of the following logistics services: Transportation Management

Public/Contract Warehousing

Distribution Management

Freight Consolidation

THIRD PARTY LOGISTICSServices Provided

Service Category Basic Service Specific VAS

Transportation Inbound, Outbound Track, Mode conversion

Warehousing Storage, Facility Management Cross-dock, In transit merge, inventory control

Information Technology Provide and Maintain advanced information systems

Transportation Management systems, Warehousing Management Systems

Reverse Logistics Handle reverse flows Recycling, Customer returns, Repair/refurbish

THIRD PARTY LOGISTICS PROVIDERSTypes

Transportation Based

Warehousing / Distribution Based

Financial Based

Forwarder Based

THIRD PARTY LOGISTICSAdvantages

Cost Reduction Elimination of infrastructure resources

Improved efficiency, service and flexibility Risk Sharing

Focus on Core Competency Better Cash Flows

Freeing up resources Access to resources not available at one’s own organization

THIRD PARTY LOGISTICSDisadvantages

× Loss of control over the logistics function

× Impact on in-house workforce

× More distance from clients – loss of personal touch

× Discontinuity of services of a 3PL Provider

× Differences of opinion / perception of the service level of 3PL Provider

THIRD PARTY LOGISTICSGrowth Drivers in India

Strong GDP growth Increased FDI Inflows

Consolidation of raw materials from vendors Better Infrastructure

Goods and Service Tax Logistics Parks

Entry of MNC 3PL players in India Required focus on Core Competency

THIRD PARTY LOGISTICSThe Future!

India spends around 14.4% of its GDP on logistics and transportation as compared to less than 8% spent by the other developing countries.

Indian logistics market is expected to grow at a CAGR of 12.17% by 2020 driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors.

3PL logistics market in India is expected to be worth US$ 301.89 billion by 2020.

The industry as a whole has moved from being just service provider to the position where they provide end to end supply chain solutions to their customers.

Visit Our Websitehttp://www.vxpress.in/

Contact Us on TOLL FREE No: 1800-220-240Email us: peaceofmind@vxpress.in