What is Contract Logistics?
Contract Logistics – a Comprehensive System
International trade has seen major change in recent years; in the past, logistics involved simply moving goods from one place to another. Today, the market demands comprehensive services and specific logistics processes, making Contract Logistics the ideal solution for companies wishing to monitor and manage their operations.
Contract Logistics is defined as the comprehensive process from production to distribution at the final point of sale. This means that Contract Logistics is not simply the process of moving goods, but a far more comprehensive course of action that merges traditional logistics with supply chain management processes.
That’s where a 4PL (Fourth Party Logistics) enters the picture, which is a system by which the main logistics operator (who thus far has been functioning as a 3PL provider) coordinates operations with a fourth stakeholder who is in charge of managing the supply chain, creating a value chain in which many different stakeholders play a role. Let’s look at it this way:
Contract Logistics is the best solution for managing the growing international flow of goods while expanding our concept of the logistics process. For instance, it would be impossible to absorb the demand for goods and transportation during high-traffic shopping seasons such as Black Friday in the United States or its equivalent in other countries.
The Contract Logistics Process
When this fourth party to the logistics process enters the scene, a new handling protocol is established for the goods; this is a value chain where service has a direct impact on the outcome of the operation. This protocol addresses various areas:
- Production Line
- Distribution Plan
- Inventory Management
- Final Distribution
Types of Contract Logistics Services
When we talk about comprehensive services, this implies synchronization across all parties to the Contract Logistics process. There are two different types of services involved:
At TIBA we have identified the key services necessary for the supply chain to be executed from start to finish, using the necessary infrastructure throughout the process.
- Access to goods from the production line
- Specialized warehousing
- Delivery and shipping of goods
- Distribution to point of sale
- Reverse logistics (post-sale and returns)
These are services TIBA offers to round out the value chain. This, however, does not mean they are less important than the main services.
- Consulting and Customs Clearance
- Insurance on Goods
- Quality Management
Why use Contract Logistics?
As we have discussed, Contract Logistics is a great solution for the high demand for goods on an international level. At TIBA, we have expert staff who can offer this comprehensive solution through our various divisions and specialized services, thus creating a value chain that spans from the production line to distribution at the final point of sale.
TIBA is prepared to address any 4PL challenges you may face. We currently carry out Contract Logistics operations and are familiar with the process. We have achieved success in this area, having transported special cargo from Mexico City to Guatape, Colombia following a feasibility study and completing the necessary customs clearances. We also have experience consolidating full containers of alcoholic beverages, including importing wine to Mexico while meeting all necessary norms. These are just two examples of how we can help with your Contract Logistics needs. Want to learn more? Contact us today!
making exports from Mexico must be challenging as risks apart of the import and export system, what the stands on risk management.
There are international standards that offer a structure to critical aspects in logistics such as the flow(associated with material, financial, information and personnel flow), the system (micro- and macro logistics) and the operations (procurement, transportation, manufacturing, distribution, warehousing, service). However, the one that refers specifically to the risk management is the ISO 31000.
Although this family of standards is not developed for a particular industry group, it provides us generic guidelines for the design, implementation and maintenance of risk management processes throughout our logistics operations.
We also face those topics with planning, organization management and control of our logistics processes.
Can you provide me more details regarding contact logistics also on the ISO standards that covers this Logistics.
Hi, Varughese, the quality of the logistics consists of obtaining high productivity operations, optimizing shipments and reducing product damages through excellent alignment with the customer’s requirements and complete regulatory compliance. An ISO certification ensures that all operational aspects will comply with these strict quality standards, whether in the warehouse, on the way to a customer or anywhere in between, so that the company can guarantee operational excellence.
There are 21,769 standards, with quality management (ISO 9001) being the most common within the logistics industry. ISO standards are also essential to help connect ports with rail centers, air freight and land distribution, offering greater efficiency in the way goods move, so they are a powerful tool to ensure collaboration and efficiency throughout the supply chain.
Thank you for explaining the contract logistics process in such great detail. I will definitely undertake contract logistics for my business. I see there are a lot of benefits of contract warehousing. I especially liked the way you explained the value chain. I would like to know more about the contract logistics. Can you please provide me with more details on this topic.
Thanks for your comment! Here you are more information about our services of contract logistics.
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We’re glad you’ve found it useful!