Whichever logistics operator you choose for your company, you must ensure that it works to achieve the maximum efficiency and optimization of your logistics processes. That is, its objective should be no other than trying to reduce costs and deadlines, while increases simplicity and speed in this particular area of your organization.
- Strong reputation and knowledge of your industry. The reputation of a logistics provider plays an important role. A provider must adapt to customer needs and satisfy demand with best-in-class service focused on cost efficiencies and superior quality. Find a provider that has proven knowledge in your business area.
- Logistics management from start to finish. To facilitate logistics management, choose a provider with the expertise and resources to manage transportation logistics in an integrated way, as well as specific storage and value-added services, without neglecting details, such as packing and security, that make the difference in handling freight.
- Worldwide presence. A provider that has developed specialized services according to market demands will help companies find solutions anywhere in the world. Having a strong presence in these markets ensures a single point of contact throughout the process. In addition, the diversity of customs regulations and individual security precautions of destination countries can create obstacles. With a provider that operates internationally, you gain the market knowledge, including customs regulations and foreign trade compliance, of other parts of the world.
- Security and Technology. Consider how the logistics provider will ensure the safe delivery of a shipment from the moment it leaves the facility to the final destination. This is especially important when handling dangerous goods. Transparency and integration of IT systems for transport and warehouse management also is vital. Ideally, the IT service provider operates with unified global core systems enabling seamless information flow.
- Covers all modes. For air, maritime, and domestic transportation, strict criteria for selecting a logistics provider ensures consistent quality levels.
- For air cargo, look for a supplier with high output frequencies, consolidation services, direct cargo and charter services, as well as express services.
- For maritime cargo, check if the product portfolio includes consolidated cargo services, project shipments, container service or containerized cargo stations.
- A supplier with a strong overland transport network ensures goods are delivered quickly and safely from door to door.
Types and Functions
First, we analyze what types of logistics operators exist according to the functions they assume within the entire logistics of the company.
This classification is done taking as reference the level of integration reached by the logistics operator with respect to the supply chain of its client. And it is specified with the denomination XPL, where the X can vary from 1 (minimum integration) to 5 (maximum integration):
- 1PL ( First Party Logistics or primary logistics operators): They are the ones who only take care of the transportation of their customers’ merchandise.
- 2PL (Second Party Logistics or secondary logistics operators): Apart from transporting products, they manage storage logistics. That is, they are in charge of storing said goods for as long as necessary, using their own means.
- 3PL (Third Party Logistics or tertiary logistics operators): Going up one level we find the operators who also go into the management and control of the warehouse. They assume even more responsibilities.
- 4PL (Fourth Party Logistics or quaternary logistics operators): They are complementary to 3PL operators, since in this case they focus on supervising and validating the work done by the former. In this way, improvements, optimizations and guarantees are obtained that otherwise would not be possible.
- 5PL (Fifth Party Logistics or quinary logistics operators): These operators are the largest and longest professional. Precisely for this reason they have the capacity to assume all the functions of the 3PLs and to add them to those of the 4PLs. This work, together and under the same command, results in total integration.