Contract Logistics: Everything You Need To Know
Distribution management is a critical function involved in the supply chain that can lead to cost savings in the overall supply chain. An organized distribution network saves significant money for the businesses the costs to store them for longer times at the warehouses is eliminated. Inventory stored at warehouses incur costs to the businesses. Rent, interest payments, insurance taxes about the stock stored coupled with depreciation and obsolescence of the product add to the costs. The services offered by logistics firms add substantial value to the manufacturing companies. These firms help different companies to reduce weak points that outcomes in loss of revenue or profits and further help to assure maximal profitability. Contract logistic companies specialize in several logistics operations which offer network analysis, mode network optimization, warehousing, management of vendor compliance, and other logistics operations. Distribution management is, therefore a great value-added service in the contract logistics market.
Contract logistics is becoming essential for retailers owing to growing e-commerce worldwide. The companies are trying to achieve online and omnichannel strategies, thus, contract logistics is necessary for retailers. Contract logistics ensures the better online order fulfillment by managing the company’s inventory, packaging, tracking, transportation of goods, reporting & forecasting, and warehouse management. Many of the online retailers reported that free and fast shipping is the most important thing for customers.
The overall contract logistics market is fragmented with the presence of several large and small scale companies. Major players having significant market share are Deutsche Post AG, XPO Logistics Inc., Kuehne + Nagel International AG, CEVA Logistics AG, DB Schenker, Hitachi Transport System Ltd, Geodis, Neovia Logistics Services, UPS Supply Chain Solutions, and Ryder System.