Contract logistics - basic definition
Contract logistics is a long-term and comprehensive inventory management that can even take place in the customer's warehouse on an outsourced basis. It is one of the more advanced services in transportation, which is done under the principle of TSL, or Transport-Shipment-Logistics. It is a service model where a given operator takes responsibility for the customer's cargo and also takes on the entire supply chain operation. Contract logistics is a way to reduce costs associated with handling goods and gain know-how related to warehouse space management.
Deconsolidation of cargo in a warehouse
What is cargo deconsolidation? When there are too few goods or they are of small size, then to cut costs, goods from different customers are transported in one container. When this container arrives at the storage space, cargo deconsolidation takes place on-site. Shipments and goods are separated on the spot according to the data from documents, and then stored and sent to a specific recipient. This type of process is much simpler and faster nowadays thanks to the use of modern computer systems.
Additional services as part of contract logistics
Contract logistics also includes a whole package of additional services that the customer may request as part of the outsourcing. These additional services include activities such as labeling, wrapping, and the preparation of promotional packages. This logistics model requires not only trust but also full cooperation from businesses and customers. Additional services are one of the many issues that are regulated between two parties and set clear requirements on certain guidelines in this business relationship. This often results in not only financial benefits but also the possibility to significantly optimize logistics and warehousing issues.
Monitoring warehouse operations with information systems
One of the duties of the warehouse and logistics operator is to report to the customer the status and quantity of the cargo entrusted. Therefore, contract logistics often uses advanced WMS-type information systems that allow for quick monitoring of shipments going from department to department or another customer. WMS monitoring programs are also very useful for real-time monitoring of receiving and shipping status. Depending on the type of system, the customer may also have access to data via special applications or the logistics operator's website.