The importance of contract logistics services in a diversified freight forwarding industry

By Jennifer Chang. Photo:Maor Attias
The scope of freight forwarding services usually refers to sea, air and land transportation services. However, with the increasing complexity of international trade activities and the rapid development of globalization, freight forwarders must actively provide a wide range of services to meet the high demand of customers. One of the very important service solutions is the development of Contract Logistics to provide complete supply chain solutions to our customers. Contract logistics is a logistics supply chain model that commits to provide complete logistics management and operation services to customers through some form of agreement to meet their supply chain management needs.
Contract logistics is a third-party logistics (3PL) service in which a company outsources various aspects of its supply chain operations to a professional logistics provider. All or part of a company's supply chain, including storage, transportation, distribution and other related activities, are managed under a contractual agreement. The goal is to optimize the customer's supply chain operations, reduce costs and improve overall efficiency. A wide range of services are provided, including receiving, warehousing, inventory management, sorting, packing, distribution, returns management, customs clearance, etc., designed to meet a wide range of customer logistics needs. In contract logistics, logistics operators sign long-term contracts with customers to provide customized logistics services according to their requirements and needs, and the service period can be as long as several years.
Why are contract logistics services so important in a diverse market? With the boom in e-commerce, the freight forwarding industry is also facing unprecedented challenges and changes. The rapid development and flourishing of e-commerce has greatly promoted the development of the logistics field. The emergence of e-commerce has driven B2B, B2C, C2C and other logistics business, supporting the city's logistics and courier system, greatly improving the efficiency of logistics and warehousing operations. The contract logistics model helps to improve logistics efficiency and cost control. Through centralized management and operations, companies can optimize their logistics processes and save costs. The freight forwarding is also critical to building long-term relationships with customers, ensuring customer loyalty and sustainability. Contract logistics is a very important service model for freight forwarders. It can provide more complete supply chain solutions, optimize logistics processes and reduce costs, and more importantly, establish long-term and stable relationships with customers, further improving customer satisfaction and corporate competitiveness in the market.
Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.