Two primary logistics service providers are contract logistics providers (CLPs) and third-party logistics (3PL) providers. While both CLPs and 3PLs offer transportation, but their approaches to doing business are different. Even, 3PLs are far ahead of CLPs in terms of services.
Contract logistics vs. 3PL is quite interesting because most people have misunderstood the services of both.
CLP and 3PL firms offer a comprehensive range of services designed to reduce costs and improve efficiency, all while strengthening customer relationships and reducing your company’s environmental impact. But what exactly is the difference between contract logistics and 3PL? And how do these two services differ?
WHAT IS CONTRACT LOGISTICS?
Contract logistics is a term used to describe the service of transporting goods on behalf of another company.
Logistics is a supply chain management process. It also refers to the movement of goods from the source to their point of sale or consumption. Logistics is a subset of supply chain management. When it is done on contracts with manufacturing companies by service providers, we label it as Contract Logistics.
HOW DOES CONTRACT LOGISTICS WORK?
Contract logistics do not have a hand in inventory management or fulfillment, but they can help with the transportation of goods.
For example, they ensure that inventory is delivered to its destination while acting as the middleman between shipping companies and online retailers so that your company’s products are distributed smoothly across the supply chain.
HOW DOES CONTRACT LOGISTICS FACILITATE E-COMMERCE COMPANIES?
Logistic companies are the backbone for today’s eCommerce climate. They manage transportation needs, negotiate prices, and plan optimized routes to get goods delivered faster and at an affordable price.
WHAT IS 3PL?
A 3PL is a company that provides a range of services to a business in addition to transportation. Types of 3PLs include freight brokers, freight forwarders, truckload consolidators, and logistic service providers.
CONTRACT LOGISTICS VS. 3PL – QUICK VIEW DIFFERENCES
- Stock Handling
Compared to traditional contract logistics companies that only offer delivery and transportation, a tech-enabled 3PL offers built-in inventory management to handle your stocks.
Online multitasking can be challenging, especially when you have to manage inventory at the same time. That’s why online retailers should hire a third-party logistics company.
A tech-enabled 3PL streamlines the process of inventory management by providing automatic updates that are easy to track in real-time. It also helps you manage your SKUs to make sure you know what’s in stock. This means you’ll know if your items are performing well over time.
CSG3PL is the only one that makes it simple to manage your inventory.
- Product Delivery
The logistics process is a necessary and crucial part of any business. On the one hand, contract logistics can help with product delivery by overseeing the delivery management processes.
On the other hand, 3PLs can operate multiple fulfillment center locations to help brands allocate products based on more demand.
Another aspect 3PLs provide is making sure customers get the best rates for shipping. They partner with major carriers and regional carrier partners to negotiate these rates, meaning brands and manufacturing companies can reap the benefits.
When you employ a 3PL, they will use WMS software to ensure that your products are received, stored, picked, packed, shipped, and restocked in the most efficient way possible.
A warehouse management system (WMS) tracks the inventory in a warehouse while providing visibility to the seller. Unlike contract logistics, it can be used to streamline and improve internal processes in a 3PL warehouse and provide information to the merchant on how well this process is going.
- Retail Fulfillment
One of the ways that 3PLs differ from contract logistics is that they can be more flexible in the retail fulfillment process. For instance, CSG3PL has an easy-to-use dashboard that gives merchants control over their product bundles and subscription orders. It also allows them to manage their B2B eCommerce orders.
WHY SHOULD YOU CONSIDER A CONTRACT LOGISTICS?
Contract logistics companies are for businesses who want to market themselves and handle the inventory side of their business, but not the logistics. They take care of everything from picking to packaging to track.
If you want to focus on the marketing side of things and leave the logistics to a professional, you should consider outsourcing to CLP.
WHY SHOULD YOU CONSIDER A 3PL?
You have enough to worry about as a business, so let the 3PL handle the logistics operations. Save time and energy by outsourcing shipping concerns to a logistics company. In return, you’ll get specialized infrastructure, technology, expertise, and support that will help your supplier stay competitive and meet customer expectations for fast, affordable shipping.
A satisfied customer equals a happy bottom line.
CSG3PL – FIRST AND THE BEST CHOICE!
CSG 3PL Melbourne helps your company grow by providing best-in-class warehousing and eCommerce order fulfillment services while you focus on your business. Their warehouse in Melbourne will provide fast and accurate fulfillment to reduce costs. You can sell more by focusing on your sales. The specialized 3PL Melbourne service will get your customers their orders on time and stress-free.
When you build an inventory management strategy, you should consider all possible options available. You may evaluate different choices using the following criteria: your availability of funds, the flexibility of your logistics provider, your current or expected volume of goods, your current or anticipated number of shipments, etc.
In a nutshell, CSG3PL is an excellent 3PL for retailers interested in customer control!