Third-Party Logistics

Third-Party Logistics

Question 1

Third-party logistics are services that allow one to contract outside functional logistics storage place or warehousing, all through to the delivery point. It ultimately enables one to concentrate on other sections of their business. Third-party logistics firms provide any services that are associated with or connected to the supply chain’s logistics. Such kinds of services involve transportation, storing or warehousing, picking, and also packing. They also include fulfillment of orders, forecasting inventory, packaging as well as freight forwarding. Third-party logistics providers have numerous benefits. One of the benefits is the reduction in cost. Third-party logistics have an additional advantage with freight firms as compared to individual shippers.  Third-party logistics can bargain pricing founded on volume frequency and also order frequency through the collaboration with carriers on behalf of numerous customers. Also, when one uses third party logistics to manage a section or even the entire supply chain, it gives one the freedom of investing in other significant segments to advance his or her company.

Another benefit is that using third party logistics allows one to manage high and low seasons efficiently and excellently. Another advantage is that 3PLs provide an excellent customer experience. They allow one to provide fast shipping, and where the orders are being sent to is never an issue as 3PLs have a broad distribution network. The other advantage of using 3PLs is that one can explore new markets without necessarily having to commit oneself to any significant investment. 3PLs also reduce risks since, in case of any shipping delay, they have the obligation of making to make substitute or backup arrangements to accomplish one’s orders quickly. Another benefit is that 3PLs handle documentation, duties, and also various border problems that could delay the shipments of those selling internationally. Such border issues usually result in increased expenses if they are not thoroughly handled.

Question 2

There are several reasons why firms opt to go international. One of the reasons is market opportunities which exist abroad. Those favorable chances include the demand for companies’ products in global markets and the changing trends in international markets that favor companies’ products. Another opportunity is the lack of competition in the internal markets, which gives the companies a first-mover benefit. The other reason why companies go international is risk diversification. Companies evade putting or concentrating all their efforts and resources into one place, thus become resistant to transforming consumption trends.

Companies are also not profoundly affected by international factors that influence customers’ behavior and the buying of the companies’ products. An excellent example of such elements is climate. Another reason why companies go international is the scale’s economies. The scale’s economies are beneficial since they allow companies to lower transport and also the distribution network’s cost. They also enable companies to manufacture their commodities cheaper in particular countries due to factors like component cost, availability of suppliers, flexibility, wages, and even various legislations.

Question 3

Off-shoring is a sector routine whereby a section of a company’s business is relocated to an external or an outside area. The company maintains full operation’s ownership while the off-shore group is considered a subsidiary. A different off-shoring mode of business procedures is when clients hire third-party off-shore companies that provide infrastructure, facilities, and also an off-shore group that directly collaborates with the clients. Off-shoring is an inexpensive and even convenient technique of employing laborers without putting output quality in jeopardy. Off-shoring also maximizes the effectiveness of functions and increases business productivity.

Firms usually off-shore parts of their business procedures due to the lack of adequate skilled personnel. Lack of sufficient workers that have the needed skills is among the primary reasons why firms off-shore a section of their business procedures. Developing countries where firms choose to off-shore are, therefore, those that have a massive pool of experienced and skilled employees. Cost-savings are another reason why firms off-shore, as decreased manufacturing costs are available in developing nations that have low labor and utility costs. Time-zone coverage is yet another reason for firms to off-shore. Most laborers in developing countries are often ready to work beyond the usual office hours and also in various shifts. A continuous workflow is thus available until the end of the project. There are several examples of large American firms, which have off-shored part of their operations.

The International Business Machines Corporation is one of the numerous companies that have off-shored part of their business procedures. IBM’s subsidiary country is India, which has thousands of employees. The workers perform software advancement, investigation and development, and even consulting services. IBM chose India as it has flexible and also decreased pricing options. India also provides quality work, has a stable government, and has the most considerable competent and even technical resources’ pool. JPMorgan Chase is yet another example, and its subsidiary country is the Philippines. The Philippines workers do financial processing, call operations, mortgage functions, and even IT services. JPMorgan Chase chose the Philippines due to the availability of cheap and specialized workforce.

Question 4

There are various reasons for making use of 3PLs that are located in Saudi Arabia. One reason is that a majority of them put effort into ensuring a complete distribution resolution with the inclusion of various shipping mediums like water, land, and even air. Also, third-party logistics that are found in Saudi Arabia are among the most developed or progressed logistics companies worldwide. They work to ensure that their clients are fully satisfied, preventing complaints. They have world-class services that have no damage guarantee to those products that they ship.

Platinum Shipping Services is one excellent example of a 3PL in Riyadh, Saudi Arabia. The company provides comprehensive, excellent services worldwide. It also has strong alliances and even networks with agents and even carriers throughout the globe. The company is also affordable and makes every logistic resolution available to its customers. Hizam Al-Qahtani Shipping and Logistics Company is yet another example located in Dammam, Saudi Arabia. It also provides integrated logistics and also shipping services. The company also possesses a Terminal, which is located in Dammam Port and Riyadh. PSL Arabia, another company, offers a complete service of Logistics Hubs, importation of containers and brokerage function, and transportation network.

References